Make a Arizona Non-Compete Agreement

Applicable State Laws - § 23-494

The State of Arizona is a blue pencil state. This means that business activities that are protected by a non-compete agreement must include a reasonable time period. They may not be any broader than absolutely necessary to protect the employer's legitimate interests; otherwise, the enforceability of non-compete agreements may be endangered, leaving the employer's business at risk.

Additionally, Arizona law dictates that employers may not impose non-compete agreements on employees who work in broadcasting. According to § 23-494, employees who work for a television station, network, radio station, or radio network may not be forced to sign non-compete agreements that restrict the employee from seeking work within a geographical radius.

Protect your Arizona business by also using an Arizona non-disclosure agreement form. Download an Arizona non-disclosure agreement form now!

How to Write an Arizona Non-Compete Agreement

To write an Arizona non-compete agreement, first review the information above about Arizona law and how the state governs non-compete agreements. To ensure the enforceability of a non-compete agreement, you should seek legal advice from an attorney. The following clauses are generally included when you write an Arizona non-compete agreement.

• Purpose. This clause explains that the purpose of a non-compete agreement is to protect your business’s confidential information. It is also used to define the parties and lists an effective date. It generally refers to the confidential information to be protected as proprietary information. Proprietary information may include protectable interests such as information about client relationships, current customers' information, among other information.
• Non-compete. This clause may address the amount of time as well as when the time period begins. The time period may begin either when the new employee or independent contractor begins working for your business or when their relationship is terminated.
• Purchase option. This clause states whether your business will allow the other party to be released from the non-compete if they agree to pay a specific amount. If so, the amount of the payment is listed in this clause.
• Jurisdiction. This clause sets Arizona law as the laws that will govern the non-compete agreement.
• Confidential information. This clause explains that the term "confidential information" used throughout the agreement means any and all technical and non-technical information provided by your business and includes, and is not limited to, any data or other proprietary information related to products, inventions, plans, methods, processes, developmental and experimental products, intellectual property, software, databases, customer lists, vendor or supply lists, marketing methods, reports, business plans, financial information, or other matters related to your business or any of your clients, consultants, or licensees disclosed to the other party under the terms of the non-compete.
• Permitted disclosure. This clause explains when the confidential information is no longer considered confidential. Generally, this happens when information becomes public through no fault of the other party named in the agreement, when information is discovered by the other party on their own without the breach of a third-party, or is released to the public after your business provides written consent.
• Confidentiality. This clause states that the other party acknowledges that the information they have access to is confidential and that they agree they will not directly or indirectly disclose or communicate it directly or indirectly to another party without your business’s written consent. They also agree that they may not use the information for any reason other than to further your business without your written consent.
• Consultants and employees bound. This clause states that the non-compete binds both consultants and employees. It also states that consultants and employees are on a need-to-know basis for the information and that they must keep the confidential information in the strictest of confidence.
• Return of materials. This clause states that when the non-compete is terminated or when your business requests it, the other party will promptly return all documents and other tangible material representing the business’s confidential information and any copies that exist. It also states that your business will notify the recipient of any discovery of any loss or unauthorized disclosure of the confidential information.
• Remedies. This clause explains the remedies your business is entitled to pursue under Arizona law if the other party breaches the agreement. Examples include the recovery of court costs and reasonable attorney fees, the award by a court of a temporary restraining order or a preliminary injunction against the unauthorized use of the information, etc., as well as all other remedies available under Arizona law or equity.
• Choice of law. This clause states that the laws of Arizona govern the non-compete agreement.
• Entire agreement. This is the final clause of the non-compete agreement. It states that the agreement may only be amended in writing and only if the parties sign it. Both parties must sign the non-compete and print their names. The parties should date the signatures.

Each party should receive a copy of the agreement for their records.