Noncompete Pacts, Under Siege, Find Haven in Idaho

“I don’t think I could get a job at Walmart without a high school diploma,” she said in an interview.

Three years ago Ms. Nolan quit and started working at ExecuTrain — LeapFox’s main competitor — where she negotiated a $65,000 salary. LeapFox sued her for violating her exit agreement, setting off a three-year legal battle that was settled out of court but inspired Ms. Nolan to get a tattoo that sits just under her collarbone and reads: “Trust No One.”

After Ms. Nolan’s defection, Codi Galloway, who owns LeapFox with her husband, Scott, became an outspoken advocate for amending state law to make it less expensive for businesses to block an employee from going to work for a rival. The result was a bill that shifted the burden from companies to employees, who must now prove they have “no ability to adversely affect the employer’s legitimate business interests.”

The bar for that is so high that Brian Kane, an assistant chief deputy in the Idaho attorney general’s office, wrote that this would be “difficult if not impossible” for an employee to do.

Ilana Rubel, one of the few Democrats in Idaho’s House of Representatives, became the bill’s fiercest critic. Ms. Rubel, a Harvard-trained lawyer who does intellectual property litigation for the Silicon Valley-based law firm Fenwick & West, described the proposal as “toxic to a good business ecosystem.”

“This bill was a giant thumb on the scale in favor of old established business at the expense of start-ups,” Ms. Rubel said.

Despite the bill’s passage, Ms. Rubel is undeterred. She has drafted legislation to repeal the law and is enlisting tech executives to help.

As Jeff Reynolds, a local entrepreneur who advises young companies at a co-working space called Trailhead, noted: “If you’re in Boise, Idaho, and you’re trying to build a start-up culture, it’s not like we have a head start in doing that. We shouldn’t try to put new impediments in our way.”

At a hearing last year to debate the proposed law, one of those who showed up was Mr. Sedrick, the Zenware chief executive who lost two engineers to TSheets. He didn’t mention his competitor by name, but complained about a local software company “hand-poaching” engineers.

Today, Mr. Sedrick tells a different story. In a recent interview, he said his feelings on noncompete agreements had mellowed.

“I want to create a good marketplace as a whole, and in reality there is enough room for all of us,” he said.

In addition, he said, the defections taught him how to be a better leader and more efficient boss. His employees are happier and better paid.

“Rather than going on the defensive, because that’s what a noncompete is, just go on the offensive and create a great environment so that people want to stay with you,” he said. “That makes you a better company in the end.”

Continue reading the main story

One comment

  1. Pingback: webdesign96

Leave a Reply

Your email address will not be published.

3 × one =