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  1. #1
    Join Date
    Jun 2008
    Posts
    3

    Default Partners and Non-Compete Agreements

    My question involves business law in the state of: Arizona
    I have been in business the past 9+ months. All agreements between us were verbal (my stupidity and his lack to provide paperwork needed). He has now decided he doesn't want a partner. He/the business owes me monies and before he signs anything showing he owes me these monies he wants me to sign a non-compete agreement. Two questions: 1.) Can a non-compete agreement be made between partners; and 2.) Are non-compete agreements legal and binding at the end of a partnership?
    Any comments or direction is appreciated.

  2. #2
    Join Date
    Sep 2005
    Location
    Behind a Desk
    Posts
    98,846

    Default Re: Partners and Non-Compete

    Yes, a noncompete may be made between partners. Whether or not the agreement is legal and binding depends on its terms. Under Arizona law, in the context of employment contracts but likely applicable to your situation as well, a restrictive covenant is considered unreasonable and unenforceable: "1) if the restraint is greater than necessary to protect the employer's legitimate interest; or 2) if that interest is outweighed by the hardship to the employee and the likely injury to the public."

  3. #3
    Join Date
    Jun 2008
    Posts
    3

    Default Re: Partners and Non-Compete

    Thank you for your response. This brings up other questions. Is a non-compete legal if signed after termination? Isn't a non-compete signed in the beginning of a work relationship and with compensation? He just wants me to sign it now so I don't "steal" his clients. Thank you for any input.

  4. #4
    Join Date
    Mar 2005
    Location
    Michigan
    Posts
    28,906

    Default Re: Partners and Non-Compete

    You can enter into such an agreement any time you choose.

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

    Default Re: Partners and Non-Compete Agreements

    You might want to have a contract attorney in your area review the non-compete before you sign it.

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