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An Arizona Employee’s Guide to Non-Compete Agreements

An Arizona Employee’s Guide to Non-Compete Agreements

“Is the non-compete I signed enforceable?” This is the number one question I get asked from employees who are looking to start a new job, start their own company, or who were recently fired from their job. Because we all hate uncertainty when our livelihood hangs in the balance, Counxel Legal Firm is here to take the uncertainty out of your life and find an answer to your situation.   

Affordable Fees

Before jumping into how we can help you, the second question people always ask is, “How much is it going to cost to have you help?” While many attorneys charge an exorbitant hourly rate (over $450 an hour) we provide services at around half that cost. Additionally, during our first meeting where you provide us with the facts of your matter, we provide you with an idea of what it will take to get to your goals. This does two things: 1) this gives you certainty in your legal costs and, 2) it creates trust in the attorney/client relationship.  

Is the Non-Compete Enforceable?

To be enforceable, a non-compete agreement needs four things: 

1. A reasonable limitation on the type of work an employee can perform;

2. A reasonable geographic limitation;

3. A reasonable time limitation; and,

4. A legitimate business purpose.

Too often, employers try to create non-compete agreements that last too long, have too broad of a geographic limitation, and cover job descriptions outside of what duties the employee performed for the company. For example, if John is an assistant manager for XYZ Company which manufactures horse saddles to be sold online, then what would an enforceable non-compete agreement look like for John. Let’s walk through the steps:

  1. “A reasonable limitation on the type of work an employee can perform” – To be enforceable XYZ Company cannot simply restrict John from doing anything that the business does, the restriction must fit what John is specifically doing for the business. If John only manages the customer service department, then XYZ Company cannot restrict John from finding a job with a competing company in their IT department.
  2. “A reasonable geographic limitation” – To be enforceable XYZ Company must figure out what its client base is. If the XYZ Company sales items online, then it technically could request a worldwide non-compete for John. If XYZ Company sales only in one store in Phoenix, Arizona, then it will be tough to have a non-compete larger than that area.
  3. “A reasonable time limitation” – To be enforceable XYZ Company must determine how it would take to replace John and build a new employee’s relationships with company personnel/clients. Understandably, for lower-level employees it does not take as long as management or executive level employees.
  4. “A legitimate business purpose” – To be enforceable XYZ Company must have a legitimate interest to protect. For example, if John is a low-level employee working as a burger flipper, then the XYZ company would have no legitimate interest in stopping John from working as a burger flipper anywhere else.

With this in mind, you can see where the specific facts of your situation play a significant role in whether or not your non-compete is enforceable. 

Quick Response Times 

The question of whether a non-compete is enforceable or not keeps individuals up at night. That is why Counxel Legal Firm responds quickly to your requests for help. We have staff dedicated to responding back to you as quickly as possible.   

Contact Counxel Legal Firm

If you have questions about a non-compete agreement or you would like to set up a strategy session with an attorney, then Counxel Legal Firm would love to help. Contact us at 480-536-6122 or at intake@counxel.com

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