An engineering firm could not enforce a non-competition agreement contained in its employment contract with a former employee because the agreement was too broad, the Supreme Court of Idaho ruled.
In December 1991, J-U-B Engineers Inc., a large Idaho firm, hired Stephen Freiburger, a professional engineer. As part of his employment contract, Freiburger signed a covenant not to compete. The contract stated: "I agree that for a period of two years following any date of termination of my employment with JUB, I would not attempt to take, or join with anyone to take (without the written consent of JUB) any of past or present clients or projects or any pending clients or projects, for [which] JUB has or would be providing professional services." While at J-U-B, Freiburger worked on various transportation projects, including some with the Idaho Dept. of Transportation.
Freiburger resigned from J-U-B in April 2001. About six months later, he joined Riedesel Engineering LLC. Riedesel wanted to submit a proposal on an IDOT project and wanted Freiburger to work on the project. He wanted to make sure that he would not be in conflict with his non-compete pact with J-U-B and asked the company for a list of clients that J-U-B considered to be covered by the covenant. J-U-B refused, stating that Freiburger should first disclose his potential clients.
Freiburger then filed a lawsuit against his former employer, asking the Idaho trial court to declare the covenant not to compete with J-U-B overbroad, unreasonable and unenforceable. After a hearing, the trial court concluded that the covenant unreasonably prohibited Freiburger from providing any services to J-U-Bs clients, current, past and potential, without regard to whether Freiburger had any contact with those clients. According to the court, the non-competition agreement was unenforceable.
J-U-B appealed to the Idaho Supreme Court. It agreed with J-U-B that the firm had a legitimate business interest in protecting its client relationships. But the court noted that covenants not to compete must be reasonable and cannot be more restrictive than necessary to protect legitimate business interests. It concluded that the clause in Freiburgers employment contract was unenforceable because it unreasonably prohibited contact with any past, present or potential client of J-U-B at the time Freiburger left the firm, regardless of whether Freiburger had helped to develop J-U-Bs goodwill with that client. Freiburger v. J-U-B Engineers Inc., 111 P.3d 100 (Sup. Ct. Idaho 2005).