By Lori N. Brown, Hymson Goldstein & Pantiliat PLLC
Over the past year, I have had several clients consult with me after leaving a job where they’d signed a non-compete agreement with their former employer. They were concerned that the non-compete agreements would prevent them from getting new jobs. This is a real concern, as non-compete agreements may be enforceable in Arizona, depending on the facts of each case.
Courts analyze the enforceability of non-compete agreements by looking mostly at the reasonableness of three main features of the provision: duration; geographic scope; and the activity restricted.
For instance, a non-compete agreement might provide that an employee cannot compete with her former employer for six months, which is more likely to be enforced by a court than would be a five-year limitation.
A non-compete agreement might say that an employee can’t compete within five miles of the former employer’s office, and that restriction is more likely to be enforced by a court one that is more broad, e.g. anywhere in the United States.
Finally, a non-compete agreement for a disk jockey who does not have much repeat business or a long-standing relationships with customers should be much shorter than a non-compete for an employee who sells and services specialized equipment or complex computer networks.
Predicting how a court will react to enforcement of these agreements is a problem. Non-compete agreements are contracts for events that may take place in the future. To enforce one, an employer will need to go to court if the former employee will not obey the non-compete agreement’s terms.
Language that works for one business or set of circumstances will not necessarily work for another. Also, the law in this area is constantly evolving. What worked even a few years ago, may not work now, based on later case law.
Because so much depends on the facts of each situation, if you are ever presented with a non-compete agreement or are an employer thinking about revising one or having an employee sign, you should strongly consider having an experienced employment lawyer review the agreement to determine its strength and enforceability.
Lori N. Brown is an attorney with Hymson Goldstein & Pantiliat, located in the Scottsdale Airpark at the Promenade. Contact: LBrown@hgplaw.com