Courts have long disfavored employee non-compete agreements, regularly striking them down as an unlawful restraint on an individual’s right to engage in his/her chosen profession. State legislatures have largely left it to the courts to determine the enforceability of these agreements on a case-by-case basis. That is changing. With increasing regularity, state legislatures are passing laws either banning non-compete agreements altogether (i.e., CA, MT, OK), or significantly restricting their enforceability (i.e., MA, WA, RI, OR, MD, ME, NH). Most states still permit customer non-solicitation and employee anti-poaching restrictions, provided they are narrowly tailored in scope and time. Although non-compete agreements are not per se unenforceable in Arizona (except as to a few professions), there is no reason to believe the Arizona legislature won’t join the growing chorus of state legislatures that have codified restrictions on these agreements.
Given these legal developments, if your organization has non-compete agreements in place, or plans to issue them, it would be prudent to have the agreement reviewed by counsel to maximize the enforceability of these agreements.