Legally Enforceable?
Yes, non-competes are legally enforceable in Arizona, although there are some occupational exceptions, such as:
- Attorneys. Law firms cannot prohibit an attorney from seeking other employment, although, the law firm is able to include a financial penalty if a lawyer violates a non-compete;[2]
- Broadcast employees. No broadcast employer may restrict an employee of a television station/network, radio station/network;[3]
- Physicians. Licensed physicians are not explicitly prohibited but to be “closely scrutinized” and the “doctor-patient relationship is special and entitled to unique protection.”[4]
There needs to be “some legitimate interest beyond the employer’s desire to protect itself from competition.”[5]
Reasonable Test
Determining whether a non-compete is “reasonable” depends if the restraint is not:
- Beyond that reasonably necessary for the protection of the employer’s business;
- Unreasonably restrictive upon the rights of the employee; and
- In contravention of public policy.[6]
Continued Employment
Maximum Term
There is no Arizona statute for a maximum term under a non-compete.Three (3) years have been deemed “reasonable” for a physician[8] but not for employment where no “special training or education is required”.[9] Therefore, for jobs that require no professional license, two (2) years or less is recommended.[10]
Although, ten (10) years were allowed for the sale of a business and restricting the seller from entering the same industry within a 100-mile radius.[11]
Sources
- Gann v. Morris (1979)
- William D. Fearnow v Ridenour, Swenson, Cleere & Evans, P.C. 138 P.3d 723 (2006)
- ARS § 23-494
- Valley Med. Specialists, 982 F.2d at 1283 (1999)
- Valley Med. Specialists, 982 P.2d at 1281 (1999)
- Olliver/Pilcher Insurance v. Daniels (1985)
- Mattison v. Johnston (1986)
- Valley Med. Specialists, 982 P.2d at 1281 (1999)
- Liss v. Exel Transp. Servs. (2007)
- Amex Distributing Co. v. Mascari (1986)
- Gann v. Morris (1979)
- Olliver/Pilcher Insurance v. Daniels (1985)
- Valley Med. Specialists, 982 P.2d at 1281 (1999)