Make a Iowa Non-Compete Agreement

Applicable State Laws - None 

The State of Iowa doesn’t have any laws that specifically regulate non-compete agreements. However, an Iowa case that went to the Iowa Supreme Court did establish a three-prong test to determine whether a non-compete agreement may be used or if the partial enforcement doctrine should be used to modify agreement:

1. Whether the agreement is truly necessary for the protection of the employer and their best interests
2. That the agreement isn't unreasonably restrictive to the employee's rights (for example, the geographic area restriction and restriction on time aren't overly broad or burdensome)
3. The agreement doesn't harm public policy

A non-compete agreement can be used to protect goodwill, trade secrets, the employer's customers, and even specialized training. To learn more about non-compete agreements, their use, and their enforceability, business owners should talk with an employment lawyer.

Protect your Iowa business by also using an Iowa non-disclosure agreement form. Download an Iowa non-disclosure agreement form now!

How to Write an Iowa Non-Compete Agreement

To write an Iowa non-compete agreement, include the following clauses:

• Purpose. This clause explains the purpose of the non-compete agreement: to protect your business’s confidential information. It also identifies the parties and their roles and includes the effective date. It may also state that confidential information may also be referred to as "proprietary information."
• Non-compete. This clause explains the restrictions on the time period, geographic area, general and specific business practices, forbid client and customer solicitation, restrictions on working for general or specific competitors, restrictions on general or specific business activities, and forbid employee solicitation.
• Time period. This clause may restate the time period restriction. It also states when the time period begins. It may start either when the employee or independent contractor begins working with the company or when their employment relationship ends.
• Purchase option. This clause states whether your business will allow the signing party to buy their way out of the contract. If so, the amount they must pay to get out of the contract is listed in this clause.
• Jurisdiction. This clause states that Iowa laws govern the restrictive covenant agreement.
• Confidential information. This clause states that "confidential information" as mentioned throughout the non-compete includes, and is not limited to, as any and all technical and non-technical information provided by your business such as data or any other proprietary information related to products, inventions, plans, methods, processes, developmental products, experimental products, intellectual property, software, databases, customer lists, vendor lists, supplier lists, marketing methods, reports, business plans, financial information, or other matters related to your business or any other clients, customers, consultants, or licensees that is disclosed to the signing party under the terms of the agreement.
• Permitted disclosure. This clause explains when confidential information is no longer considered confidential. Common reasons include information being made public through no fault of the signing party, the signing party discovering information on their own without a breach from another party, and your business providing written consent for the release of certain information.
• Confidentiality. This clause states that the signing party acknowledges that the information they may access is confidential and they agree they will not directly or indirectly disclose or communicate it to another party without the written consent of your business. They also agree they may not use the information for any reason except to further your business unless they first receive written consent from your business.
• Consultants and employees bound. This clause states that the agreement binds both consultants and employees to keep the confidential information in the strictest of confidence as well as on a need-to-know basis with the information.
• Return of materials. This clause states that when the non-compete agreement is terminated or when requested by your business, the signing party will promptly return all documents and other tangible material that represents the confidential information of your business as well as any copies that exist. This clause also states that your business will notify the signing party upon discovering any loss or unauthorized disclosure of the confidential information.
• Remedies. This clause explains the remedies the business is entitled to pursue in the event the signing party breaches the agreement. The remedies are provided by Iowa law. Examples include the recovery of court costs and reasonable attorney fees, the award by an Iowa court of a temporary restraining order or preliminary injunction against the unauthorized use of the confidential information, etc., and all other remedies available under the law or available as a means of equity.
• Choice of law. This clause states the parties agree that Iowa law will govern the agreement.
• Entire agreement. This final clause states that the entire agreement may only be amended in writing and if both parties sign the amendment.

Both parties must sign and print their names. The signatures should be dated. Each party should receive a copy of the finalized agreement for their records.