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  1. #1
    Join Date
    May 2009
    Posts
    1

    Default 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

  2. #2
    Join Date
    Apr 2007
    Location
    Il.(near StL,Mo.)
    Posts
    5,252

    Default 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.

  3. #3
    Join Date
    Jan 2008
    Location
    Toledo, OH
    Posts
    16,307

    Default 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.

  4. #4
    Join Date
    Sep 2005
    Location
    Behind a Desk
    Posts
    98,846

    Default 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.

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