Mesa Business Attorney discusses Enforcing Non-compete Ageements

How An Attorney Can Help Enforce Agreements, Including Non-compete Clauses

Factors in drafting (or fighting about) a non-compete agreement in Arizona

Non-compete agreements can be used to protect a business’s most important asset, its customers. These agreements are frequently given as a condition of employment and can restrict future competition from its employees. Non-compete agreements are governed by the states and for this reason there will be variations in the law depending on where the business is done. However, non-compete agreements are enforceable in most states, including Arizona.
If a court believes that an agreement is unreasonable or over-burdensome it will be unenforceable. To make an agreement reasonable, restrictions to competition should be limited by time, scope, and geography. Every one of these restrictions must be reasonable. If there is any restriction in the agreement that is unreasonable, the entire agreement will probably be unenforceable. As a practical matter, this means that the geographic area can only be as large as necessary to protect the employer’s legitimate interests; the length of the agreement can only be as long as necessary to protect the employer’s legitimate interests; and the scope of activities prevented can only include those necessary to protect the employer’s legitimate interests. Some shorthand examples: If your company only does business in Maricopa County, then the agreement should not limit competition outside Maricopa County. If you could train a replacement for the departing employee and bring them up to speed in six months, then the agreement shouldn’t be longer than six months. And if your company works in the x-ray technology area, then the type of activity restricted should probably be related to x-ray technology. Each of these examples is just an example.

The validity of a non-compete agreement will depend on the unique circumstances of each situation. Reasonable restraints in one situation can be found to be excessive in another. Attorneys at Gunderson, Denton & Peterson, PC have drafted non-compete agreements, have consulted with clients about the enforceability of non-compete agreements, and have litigated on both sides (employer and employee) of lawsuits regarding non-compete agreements.