Arizona Employee Agreement with Covenant not to Compete
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How to fill out Employee Agreement With Covenant Not To Compete?
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FAQ
California law bars covenants not to compete in nearly all circumstances.
Answer: While the Courts do not favor non-compete agreements, they are enforceable so long as they are 1) reasonable as to geographic scope, 2) reasonable as to duration of time, and 3) narrowly defined to limit activities that you performed for the employer.
The well-known general rule is that a covenant not to compete is only enforceable if its terms are reasonable and necessary to protect the legitimate business interests of the employer.
In California, it's illegal to enforce non-compete agreements that put limits on an employee's future job prospects. ing to California Business and Professions Code Section 16600, any contract that restricts an individual from ?engaging in a lawful profession, trade, or business? is null and void.
Covenants not to compete are frequently enforced to prevent a former employee from soliciting his or her former customers to buy competing products or services from the new employer.
Specificity: A non-compete agreement must be specific about the activities it prohibits. Additionally, the covenant must clearly articulate what activities are considered competing and those activities must be substantially similar or related to the work the employee performed for the employer.
The agreement is not enforceable because the time period it covers is too long. The period considered reasonable varies by state but typically ranges from 6 months to two years. Longer agreements will likely be found invalid. The territory covered by the agreement is too large.
In summary, non-compete agreements are legal in Arizona, but do have limitations.