Noncompete agreements remain subject to judicial review for reasonableness

On October 31, 2022, the Idaho Supreme Court published a decision in which it reiterated the appropriate standards for reviewing, enforcing, and possibly modifying noncompete agreements. The decision also illustrated how a valid arbitration agreement may not shield an employer from litigation if the employer fails to seek arbitration in a timely manner.

Background

On December 7, 2018, Donald Blaskiewicz entered into a professional services agreement (PSA) with the Spine Institute of Idaho, a medical treatment provider located approximately 10 miles west of Boise, Idaho.

The PSA contained a noncompete clause that prohibited Blaskiewicz from practicing medicine within 50 miles of the Spine Institute’s office for a period of 18 months following the termination of his employment for any reason.

Under the terms of the PSA, Blaskiewicz had two ways to avoid the noncompete clause: He could either get permission from the medical facility to practice medicine within the proscribed area, or he could pay the institute $350,000 in liquidated damages. The PSA also required “any disputes arising out of or related to” the PSA to be resolved by arbitration.

Legal battle

On April 16, 2020, the Spine Institute terminated Blaskiewicz’s employment. On May 1, 2020, he filed a suit seeking to void the noncompete clause so he could accept employment with St. Luke’s hospital system, which was a competitor of the Spine Institute.