What is the enforceability if a non-compete agreement?

UPDATED: Oct 1, 2022

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What is the enforceability if a non-compete agreement?

My mother went to work for a pearl company that is based online out of FL. She is not happy with the way the business is run and has decided to work for a different company and/or start her own company. They are saying that because she signed a non-compete clause they will sue her. Is this enforceable? She lives in AZ.

Asked on October 11, 2018 under Employment Labor Law, Arizona


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

Non-competes are enforcecable in Arizona, but courts will "blue pencil" or modify/edit them down if they "overreach," or go too far. The purpose of a noncompetion agreement is to protect the employer from competion for a reasonable time. That means:
1) It will only prevent working for (or starting) companies doing the same thing as the employer--i.e. actual or potential competitors. Your mother could work in a different industry with no problem.
2) It will only prevent employment by companies which *actually* compete, or sell to the same potential customers. If a company only sells locally, the noncompete would only affect working for local competitors, for example.
3) It only prevents competition for a "reasonable" time. What is reasonable varies with employee position and level, but a good rule of thumb is, junior staff, around 6 months; senior staff (VPs, senior managers, or better) around one year; former owners who sold the company, several years.
So if the noncompete is broader, in time or scope, then what is needed to protect the employer, a court will enforce it, but will reduce its scope or duration.
My own experience: leaving a publishing company, I had a noncompete for 6 months. I wanted to start my own publishing company. It takes awhile to set up a company: establish contacts, get inventory, get funding, arrange for infrastructure and shipping, etc. It took me 8 months of work to set up my company, so I did that once I left my former employer;  by the time I was ready to go, the noncompete was over.

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