ExpertLaw.com Forums

How Will My Non Compete Restrict Me

Printable View

  • 05-25-2009, 12:35 PM
    mattnduke
    How Will My Non Compete Restrict Me
    My question involves employment and labor law for the state of: Arizona

    I'm looking to leave my current company in the technology field and start my own company. I'm trying to see how my non-compete will come into play. I am currently a sales rep managing a territory. Our corporate office is in Colorado. I will be starting a company that will be in direct competition with my current employer. I am not intending to take my any of my clients with me, but some may request to do so. We resell hardware and software technology. Am I even able to start this company due to the restrictions of my non compete? I have been told that Arizona is a "right to work" state and this may help me. The non compete mentions trade secrets and propietary information. Trade secrets won't come in to play as my company doesn't manufacture or have anything trade marked. We simply resell hardware and software. I'm not sure where proprietary information would come in to play. Feel free to ask me any questions regarding information that I may have left out.

    Here is my non compete details-

    Employee acknowledges and understands that the business of the company is highly competitive and that such business depends on its success on maintaining information relating to such business in strict confidence, and avoiding direct competition by emplyees who have been employed as mgmt. personnel or staff to mgmt personnel with the or who have had access to the trade secrets and proprietary info of the company. Employee agrees for a period of 2 years from termination of this agreement, employee will not act as employer, employee, consultant, principal, agent or otherwise directly or indirectly call on, solicit, or accept work from, or do business with any client or prospects of company whom employee had access to trade secrets or proprietary info
  • 05-25-2009, 08:29 PM
    Betty3
    Re: How Will My Non Compete Restrict Me
    It's always best to take a non-compete agreement to an employment or contract attorney in your area for review & advice.
  • 05-26-2009, 05:30 AM
    LawResearcherMissy
    Re: How Will My Non Compete Restrict Me
    Concur with Betty.

    In some states, non-compete agreements have been held to be unenforceable, except in certain narrowly defined circumstances. This varies from state to state and contract to contract.
  • 05-26-2009, 07:30 AM
    Mr. Knowitall
    Re: How Will My Non Compete Restrict Me
    In Arizona,
    Quote:

    Quoting Bed Mart v Kelley, 202 Ariz. 370; 45 P.3d 1219 (2002)
    A covenant not to compete in an employment agreement is "valid and enforceable by injunction when the restraint does not exceed that reasonably necessary to protect the employer's business, is not unreasonably restrictive of the rights of the employee, does not contravene public policy, and is reasonable as to time and space." Phoenix Orthopaedic Surgeons, Ltd. v. Peairs, 164 Ariz. 54, 57, 790 P.2d 752, 755 (App. 1989), disapproved on other grounds, Valley Med. Specialists v. Farber, 194 Ariz. 363, 982 P.2d 1277 (1999). A restrictive covenant is reasonable and enforceable when it protects some legitimate interest of the employer beyond the mere interest in protecting itself from competition such as preventing "competitive use, for a time, of information or relationships which pertain peculiarly to the employer and which the employee acquired in the course of the employment." Farber, 194 Ariz. at 367 P12, 982 P.2d at 1281 (quoting Harlan M. Blake, Employee Agreements not to Compete, 73 HARV. L. REV. 625, 647 (1960)). An employer may also have a legitimate interest in having a "reasonable amount of time to overcome the former employee's loss, usually by hiring a replacement and giving that replacement time to establish a working relationship." Id. at 370 P25, 982 P.2d at 1284 (quoting Blake, supra, 73 HARV. L. REV. at 659).

    Although I'm not offering a definitive analysis, the clause you describe has a reasonable basis - an employer can be harmed if an employee takes advantage of inside information such as customer lists and order histories, or lures away some key employees, and starts a business in the same field targeting the same customers. But the two year scope may be pushing things.

    Given the risk and cost of starting a business, I suggest following the prior recommendation of running your contract past a lawyer. You don't want to get hit with an injunction just as you start making sales.
All times are GMT -7. The time now is 10:39 PM.
Powered by vBulletin® Version 4.2.4
Copyright © 2023 vBulletin Solutions, Inc. All rights reserved.
Copyright © 2004 - 2018 ExpertLaw.com, All Rights Reserved