IDAHO PASSING LAW HANDCUFFING TOP MLM-NETWORK MARKETING DISTRIBUTORS WITH NON-COMPETE AGREEMENTS
Ed Note: Melaleuca's legal department sent a nasty gram that SB 1393 below is not all Melaleuca's doing, so I should not call it "Melaleuca's law." Although fully within my editorial rights under the First Amendment, they did pluck my heart strings. Therefore, I will split the editorial "baby" in half and quote from the Post Register online and print newspaper - Idaho Falls, Idaho:
"The proposal came at the bequest of the Idaho Association of Commerce and Industry, the States most influential business lobby. A similar but much broader version put forth at the urging of Melaleuca Inc. CEO Frank Vandersloot was killed in the Senate last year."
If you want to check out the full article it is only $6 a month to subscribe to the Post Register in Idaho Falls. For their electronic subscription, click here: http://www.postregister.com/subscribe/ Interesting paper! On the page with the article below they have a neat graphic by Steve Fischbach of a pair of handcuffs with NON COMPETE AGREEMENT across them. I am trying to buy the graphic for future use!
"Although the initiative had the back of several member of the state's most influential business lobby, one of it's main supporters was Melaleuca Inc CEO Frank Vandersloot."
Now back to my editorial ranting about the dangers of Independent Contractors being equated with employees by the Internal Revenue Service. This means that MLM Distributors and Companies may be forced to do earnings withholding on a monthly basis if the IRS and House Ways and Means Committee sees no separation in how they are treated. Read the bill below (and my red markups) and see if you can find a difference between an Employee and Independent Contractor!
Rod Cook Ur. Editor
IDAHO SENATE BILL NO. 1393
View Bill Status - View Bill Text
View Statement of Purpose / Fiscal Impact
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Bill Status: S1393.......................................by COMMERCE AND HUMAN RESOURCES
BUSINESS INTERESTS - Adds to existing law relating to labor to provide for agreements and covenants to protect employers' legitimate business interests. 02/08 Senate intro - 1st rdg - to printing - 03/18 3rd rdg - PASSED - 43-27-0
Bill Text
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-ninth Legislature Second Regular Session - 2008
IN THE SENATE
SENATE BILL NO. 1393
BY COMMERCE AND HUMAN RESOURCES COMMITTEE
1 AN ACT
2 RELATING TO LABOR; AMENDING TITLE 44, IDAHO CODE, BY THE ADDITION OF A NEW
3 CHAPTER 27, TITLE 44, IDAHO CODE, TO PROVIDE FOR AGREEMENTS AND COVENANTS
4 TO PROTECT EMPLOYERS' LEGITIMATE BUSINESS INTERESTS, TO DEFINE TERMS, TO
5 PROVIDE THAT A COURT MAY LIMIT OR MODIFY CERTAIN AGREEMENTS AND TO PROVIDE
6 FOR ENFORCEMENT, TO PROVIDE THAT CERTAIN RESTRICTIONS OF DIRECT COMPETI-
7 TION SHALL NOT EXCEED A SPECIFIED PERIOD OF TIME AND TO PROVIDE REBUTTABLE
8 PRESUMPTIONS.
9 Be It Enacted by the Legislature of the State of Idaho:
10 SECTION 1. That Title 44, Idaho Code, be, and the same is hereby amended
11 by the addition thereto of a NEW CHAPTER, to be known and designated as Chap-
12 ter 27, Title 44, Idaho Code, and to read as follows:
13 CHAPTER 27
14 AGREEMENTS AND COVENANTS PROTECTING
15 LEGITIMATE BUSINESS INTERESTS
16 44-2701. AGREEMENTS AND COVENANTS PROTECTING LEGITIMATE BUSINESS INTER-
17 ESTS. A key employee or key independent contractor may enter into a written
18 agreement or covenant that protects the employer's legitimate business inter-
19 ests and prohibits the key employee or key independent contractor from engag-
20 ing in employment or a line of business that is in direct competition with the
21 employer's business after termination of employment, and the same shall be
22 enforceable, if the agreement or covenant is reasonable as to its duration,
23 geographical area, type of employment or line of business, and does not impose
24 a greater restraint than is reasonably necessary to protect the employer's
25 legitimate business interests.
26 44-2702. DEFINITIONS. For purposes of this section, the following terms
27 shall have the following meanings:
28 (1) "Key employees" and "key independent contractors" shall include those
29 employees or independent contractors who, by reason of the employer's invest-
30 ment of time, money, trust, exposure to the public, or exposure to
31 technologies, intellectual property, business plans, business processes and
32 methods of operation, customers, vendors or other business relationships dur-
33 ing the course of employment, have gained a high level of inside knowledge,
34 influence, credibility, notoriety, fame, reputation or public persona as a
35 representative or spokesperson of the employer, and as a result, have the
36 ability to harm or threaten an employer's legitimate business interests.
37 (2) "Legitimate business interests" shall include, but not be limited to,
38 an employer's goodwill, technologies, intellectual property, business plans,
39 business processes and methods of operation, customers, customer lists, cus-
40 tomer contacts and referral sources, vendors and vendor contacts, financial
41 and marketing information, and trade secrets as that term is defined by chap-
1 Chapter 8, title 48, Idaho Code.
2 44-2703. CONSTRUCTION AND ENFORCEMENT. To the extent any such agreement
3 or covenant is found to be unreasonable in any respect, a court shall limit or
4 modify the agreement or covenant as it shall determine necessary to reflect
5 the intent of the parties and render it reasonable in light of the circum-
6 stances in which it was made and specifically enforce the agreement or cove-
7 nant as limited or modified.
8 44-2704. RESTRICTION OF DIRECT COMPETITION -- REBUTTABLE PRESUMPTIONS.
9 (1) Under no circumstances shall a provision of such agreement or covenant, as
10 set forth herein, establish a postemployment restriction of direct competition
11 that exceeds a period of eighteen (18) months from the time of the key
12 employee's or key independent contractor's termination unless consideration,
13 in addition to employment or continued employment, is given to a key employee
14 or key independent contractor. Nothing in this chapter shall be construed to
15 limit a party's ability to otherwise protect trade secrets or other informa-
16 tion deemed proprietary or confidential. Ed. Note: Ouch! Blank check! Scary!!!
17 (2) It shall be a rebuttable presumption that an agreement or covenant
18 with a postemployment term of eighteen (18) months or less is reasonable as to
19 duration.
20 (3) It shall be a rebuttable presumption that an agreement or covenant is
21 reasonable as to geographic area if it is restricted to the geographic areas
22 in which the key employee or key independent contractor provided services or
23 had a significant presence or influence.
24 (4) It shall be a rebuttable presumption that an agreement or covenant
25 is reasonable as to type of employment or line of business if it is limited to
26 the type of employment or line of business conducted by the key employee or
27 key independent contractor while working for the employer.
28 (5) It shall be a rebuttable presumption that an employee or independent
29 contractor who is among the highest paid five percent (5%) of the employer's
30 employees or independent contractors is a "key employee" or a "key independent
31 contractor." To rebut such presumption, an employee or independent contractor
32 must show that it has no ability to adversely affect the employer's legitimate
33 business interests.
Statement of Purpose / Fiscal Impact
STATEMENT OF PURPOSE
RS 17822
This legislation provides that an employer may enter into agreements with key employees and key independent contractors to protect a company's legitimate business interests. The legislation defines "key employees" and "legitimate business interests," and creates rebuttable presumptions as to the terms of the agreements.
FISCAL IMPACT
There is no impact to the general fund.
Contact
Name: Alex LaBeau
Idaho Association of Commerce and Industry - Also known as the Idaho Chamber of Commerce. Your editor has never belonged to a Chamber of any kind that was not lobbying City Hall or the State Legislature for something.
343-1849
