The Eighth Circuit Court of Appeals ruled last week that an Iowa company in the business of selling fertilizer, nutrients, and crop-management services could not enforce a noncompetition agreement against a former independent contractor, a sales representative. In AG Spectrum Co. v. Elder, the noncompetition provision prohibited the sales representative from competing with the company for three years if either party ended the contractual relationship. The court found that the company did not show that the noncompetition provision in its independent contractor agreement was reasonable – the governing test under Iowa contract law. In Iowa, the ultimate goal of enforcing noncompetition agreements is to prevent unjust enrichment.
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