Make a Arkansas Non-Compete Agreement

Arkansas Non-Compete Laws - § 4-75-101

Arkansas law dictates that any employee that holds a professional license in the medical field may not be required to sign a non-compete agreement. Furthermore, it says that all employers who require their employees to sign non-compete agreements may only do so if they have a protectable business interest and the agreement’s limitations in both time and scope are not greater than what is necessary (§ 4-75-101).

Arkansas does not allow the blue-pencil concept, which allows portions of a contract to be enforced, even if other portions are found void or unenforceable. To ensure that Arkansas courts will enforce your non-compete agreement, it is important to seek legal advice from an employment law attorney.

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

How to Write an Arkansas Non-Compete Agreement

To write an Arkansas non-compete agreement, first review Arkansas code on unfair practices. Remember to keep your non-compete agreement's geographic limitation and time limit reasonable. To ensure that your non-compete is enforceable, seek legal advice. To write an Arkansas non-compete agreement, use the following clauses:

• Purpose.  This clause explains the purpose of the agreement: to protect the confidential information of your business. It also identifies the parties and includes an effective date. It refers to confidential information as proprietary information. Proprietary information may include, and may not be limited to, profit margin information, current customers' information, and other sensitive information related to your business.
• Non-compete. This clause may include the time restriction, geographical restriction, restricted business practices, clients or customers, general competitors, restricted business activities, specific competitors, and non-solicitation of employees.
• Time period. This clause may outline the time period restriction as well as explains when the time period begins. It 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 agreement for making a payment of a specific amount. If so, the specific payment amount is listed.
• Jurisdiction. This clause sets Arkansas code as the law that will be used to govern the agreement.
• Confidential information. This clause defines the term "confidential information." Generally, it refers to any and all technical and non-technical information provided by your business that includes, and is not limited to, any data or other proprietary information related to products, inventions, plans, methods, processes, developmental or experimental matters, intellectual property, software, databases, customer lists, vendor or supplier lists, marketing methods, reports, business plans, financial information, or other matters related to your business, clients, consultants, or licensees that may be disclosed to the other party under the terms of the non-compete.
• Permitted disclosure. This clause explains when confidential information will no longer be considered confidential. This usually happens when information becomes public by no fault of the other party, when the recipient discovers the information on their own without the breach of another person, or when information is released to the public after your business provides written consent for the release.
• Confidentiality. This clause states that the recipient acknowledges the information they have access to is confidential and that they agree they will not directly or indirectly disclose or communicate it to another party without first receiving written consent from your business. They also agree that they may not use the information for any reason except to further the business without first obtaining written consent.
• Consultants and employees bound. Both consultants and employees are bound by the non-compete and are on a need-to-know basis for information. They must keep 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 must promptly return all documents and other tangible materials representing the business’s confidential information and any copies that exist. It also states that your business will notify the other party of any discovery of a loss or unauthorized disclosure of confidential information.
• Remedies. This clause explains the remedies that your business is entitled to pursue under Arkansas code if the other party breaches the non-compete. Examples include the recovery of court costs and reasonable attorney fees, the award by the Arkansas court of a temporary restraining order or preliminary injunction against the unauthorized use, etc., as well as all other remedies available under Arkansas code or available through equity.
• Choice of law. This clause states that the laws of Arkansas govern the non-compete agreement.
• Entire agreement. This is the final clause of an Arkansas non-compete agreement. It states that the entire agreement may only be amended in writing and only if the parties sign the amendment. To execute the existing non-compete, both parties must sign and print their names. The parties should date the signatures.

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