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:
- “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.
- “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.
- “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.
- “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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