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  1. #1
    Join Date
    Jul 2007
    Posts
    2

    Default Enforceability of Non-Compete Clauses Across Jurisdictions

    I have something of an odd situation with a non-compete.

    I work for company X, they are headquartered in Canada where I used to live and where I signed my agreement with them. They do however have US operations and they "functional" HQ is now here (Florida)

    Subsequently I have moved to Arizona. (I obviously work from home, hence the various locations) I am now interested in working with a competitor, that is based in California (which I understand does not support non-competes) My position is as a project manager - the job would be almost identical at the new company. I implemement software - I have nothing to do with code, or intellectual property.

    My non-compete is very simple - It simply says I can't work for a competitor within 6 months of leaving company X. I'm wondering my current employer would have any legal recourse with me if I left and went to work for the new company. Again - I'm not a "key" employee and I no longer reside in the country where the agreement was signed.

    Any thoughts?

  2. #2
    Join Date
    Jul 2006
    Posts
    5,437

    Default Re: Question about non-compete across several jurisdictions.

    Non-compete clauses must have at least two components: time and space.

    You say the time here is 6 months.

    What is the space (if any)?

  3. #3
    Join Date
    Jul 2007
    Posts
    2

    Default Re: Question about non-compete across several jurisdictions.

    Thank you for your reply.

    It says nothing about space. It literally reads:

    "You also agree not to accept employment or contract work from any of X's competitors for a period of six (6) months folliwng departure if you and/or X decide to terminate the employment relationship".

    That is it.

  4. #4
    Join Date
    Apr 2007
    Location
    Il.(near StL,Mo.)
    Posts
    5,252

    Default Re: Question about non-compete across several jurisdictions.

    It's always best to run a non-compete by an employment lawyer since we cannot read the entire agreement & laws vary by state.

  5. #5
    Join Date
    Mar 2005
    Location
    Michigan
    Posts
    28,906

    Default Re: Enforceability of Non-Compete Clauses Across Jurisdictions

    Arizona will uphold non-competition clauses on a case-by-case basis, if the clauses are determined to be reasonable under the "totality of the circumstances."
    Quote Quoting Fearnow v. Ridenour, Swenson, Cleere & Evans, P.C., 213 Ariz. 24;
    138 P.3d 723 (2006)

    As a general rule, a contract restricting the right of an employee to compete with an employer after termination of employment "which is not unreasonable in its limitations should be upheld in the absence of a showing of bad faith or of contravening public policy." Lassen v. Benton, 86 Ariz. 323, 328, 346 P.2d 137, 140 (1959), modified on other grounds, 87 Ariz. 72, 347 P.2d 1012 (1959); see also 15 Corbin on Contracts § 80.15 (2003) (noting that in determining the enforceability of such a provision, "reasonableness is the North Star"). Such a restrictive covenant is unreasonable if "(a) the restraint is greater than is needed to protect the promisee's legitimate interest, or (b) the promisee's need is outweighed by the hardship to the promisor and the likely injury to the public." Restatement (Second) of Contracts § 188 (1981).

    The determination of "[r]easonableness is a fact-intensive inquiry that depends on the totality of the circumstances." Valley Med. Specialists v. Farber, 194 Ariz. 363, 369 P20, 982 P.2d 1277, 1283 (1999). "Each case hinges on its own particular facts." Bryceland v. Northey, 160 Ariz. 213, 217, 772 P.2d 36, 40 (App. 1989). As the court of appeals has noted,

    [w]hat is reasonable depends on the whole subject matter of the contract, the kind and character of the business, its location, the purpose to be accomplished by the restriction, and all the circumstances which show the intention of the parties. Gann v. Morris, 122 Ariz. 517, 518, 596 P.2d 43, 44 (App. 1979).

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