content top

Non-Compete Agreements Under Arizona Law

Leavitt_Lindsay_99x135px_webBy Lindsay G. Leavitt

The first porridge in Goldilocks and the Three Bears was too hot, the second was too cold and the third was just right. Non-compete agreements under Arizona law follow a similar vein: some are too broad, some are too narrow, and some are just right.

Although Arizona law recognizes the need to protect legitimate business interests, it also hesitates to restrict individuals from pursuing their chosen careers. A well drafted non-compete agreement can successfully balance the interests of both the employer and employee.

A non-compete agreement is unreasonable and will not be enforced if (1) the restraint is greater than necessary to protect the employer’s legitimate interest; or (2) that interest is outweighed by the hardship to the employee and the likely injury to the public

In October 2013, the Arizona Court of Appeals held that a non-compete agreement between a public relations company and its former president, Ann Noder, was overbroad and therefore unenforceable. Orca Communications Unlimited, LLC v. Noder, 233 Ariz. 411, 314 P.3d 89 (App. 2013). The agreement prohibited Noder from directly or indirectly advertising, soliciting, or providing “Conflicting Services” within a “Restricted Territory” for eighteen months after her employment had ended. The court found that the restrictive covenants protected more than Orca’s legitimate business interests because it prevented Noder from pursuing any type of work in the public relations industry, even work that would be based on her skill and talents and not merely confidential information or customer relationships. The court refused to rewrite the provisions to make them enforceable, thus freeing Noder to immediately compete against her former employer.

A valid non-compete agreement cannot be copied and pasted from a preexisting template. Each industry and business has unique circumstances and interests that must be considered when drafting an effective and enforceable non-compete agreement.

Seeking the advice of competent legal counsel can give employers the confidence to avoid the trial and error method of Goldilocks – ensuring that their non-compete agreements will be “just right.”

Legal Disclaimer

Please note that the materials contained within this web site have been prepared by Jennings, Strouss & Salmon, P.L.C. for informational purposes only so that readers may learn more about the firm, the services it provides the background of its attorneys, and recent developments in the law. These materials do not constitute, and should not be considered, legal advice, and you are urged to consult with an attorney on your own specific legal matters. Transmission of the information contained in the Jennings, Strouss & Salmon web site is not intended to create, and receipt by the reader does not constitute, an attorney-client relationship with Jennings, Strouss & Salmon or any of its individual attorneys. While we would certainly like to hear from you, we cannot represent you until we know that doing so will not create a conflict of interest. Please do not send us any information about a matter that may involve you until you receive written authorization to do so from one of our attorneys. Unless otherwise indicated in individual attorney biographies, attorneys resident in the firm's various offices are not certified by the Board of Legal Specialization or a similar body of any State. This site may contain hyperlinks to Web sites operated by parties' independent from Jennings, Strouss & Salmon. Such hyperlinks are provided for your reference only. Jennings, Strouss & Salmon does not control such Web sites, and is not responsible for their content. Jennings, Strouss & Salmon's inclusion of hyperlinks to such Web sites does not imply any endorsement of the material on such Web sites or any association with their content. Your access and use of such sites, including information, material, products, and services therein, shall be solely at your own risk. Further, because the privacy policy of this Site is applicable only when you are on this Site, once linked to another Web site, you should read that site's privacy policy before disclosing any personal information.