Generally, a covenant not to compete is when an Arizona employee agrees not to work for an employer's competitors when the employee leaves the company. Covenants not to compete are also known as "non-compete clauses". An employee who signs a covenant not to compete may receive compensation for the agreement, or in some cases the agreement is a condition for their being hired.
When are Covenants not to Compete Unenforceable?
Whether or not a judge will conclude that the covenant is enforceable can be difficult to know beforehand. Even though the interests of an employer are important, Arizona courts value a person's freedom to select the type of employment that they desire. Thus, courts will typically uphold only those covenants not to compete that they conclude to be reasonable. Some agreements that courts have considered to be unreasonable include terms that last for an unusually long period of time or that cover a geographic around Surprise that is unreasonably broad.
Covenants must also be limited to restricting dealings with those competitors that are rationally related to the employer's industry. Lastly, the employer needs to have an acceptable business interest which justifies their motives in requiring their employee to sign a covenant not to compete.
Do I Need an Attorney when Dealing with a Covenant not to Compete?
Before you sign any documents that could restrict your rights, you may consider hiring a Surprise, Arizona attorney who can review the covenant. The attorney can negotiate modifications to the contract if they are needed, and can draft a new clause which is acceptable to the parties involved. Attorneys can provide valuable counseling to employers who are considering suing an employer who breached a covenant not to compete. They can also assist employees who have signed an agreement limiting their employment options.
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