
Quoting
White Pigeon Agency, Inc v Madden, No. 1-203 / 00-1189 (IA App, July 31, 2001)
The court employs a three-prong test when deciding whether to enforce a restrictive covenant. Phone Connection, Inc. v. Harbst, 494 N.W.2d 445, 449 (Iowa Ct. App. 1992). First, the restriction must be reasonably necessary for the protection of the employer's business. Id. Second, it must not unreasonably restrict the employee's rights. Id. Finally, the restriction must not be prejudicial to the public interest. Id. While fair protection must be afforded to the business interests of the employer, the restriction on the employee must be no greater than necessary to protect the employer. Dental East, P.C., 423 N.W.2d at 555. The covenant must not be oppressive or create hardships on the employee that are out of proportion to the benefits expected by the employer. Id.
The reasonableness of a restraint and the validity of a covenant ot to compete seldom depend on a single fact. Iowa Glass Depot, Inc. v. Jindrich, 338 N.W.2d 376, 382 (Iowa 1983). Instead, we consider and weigh all the facts carefully to determine each case in its entire circumstances. Id. These factors include the nature of the business, a defendant's proximity to the customers, accessibility to information peculiar to the employer's business, the nature of the occupation that is restrained, as well as matters of basic fairness. Id.
A restrictive covenant must bear some relation to the activities of the employee. Baker v. Starkey, 259 Iowa 480, 490, 144 N.W.2d 889, 895 (1966). It must not restrain the employee's activities in a territory into which his former work did not take him. Id. Nor should it give him the opportunity to enjoy undue advantage in later competition with his employer. Id. The relevant question is whether the covenant restrains the employee beyond the point where he could be reasonably anticipated to injure his employer's business.