Non-Compete Agreement - Arkansas

EMPLOYEE NON-COMPETITION AGREEMENT

(Arkansas)

I. DOCUMENT HEADER

This Employee Non-Competition Agreement (this “Agreement”) is made and entered into as of [EFFECTIVE DATE] (the “Effective Date”) by and between:

1. [EMPLOYER LEGAL NAME], a [STATE OF INCORPORATION] [ENTITY TYPE] with its principal place of business at [EMPLOYER ADDRESS] (“Employer”); and
2. [EMPLOYEE FULL NAME], an individual residing at [EMPLOYEE ADDRESS] (“Employee”).

Employer and Employee are each a “Party” and collectively the “Parties.”

Recitals

A. Employer is engaged in [GENERAL DESCRIPTION OF BUSINESS ACTIVITIES] (the “Business”).
B. Employee is or will be employed as [POSITION TITLE], and will gain access to Employer’s Confidential Information and customer goodwill.
C. Employer has legitimate business interests that Arkansas law allows it to protect through reasonable restrictive covenants supported by adequate consideration.
D. Employee acknowledges that (i) continued employment, (ii) specialized training, and (iii) [ADDITIONAL CONSIDERATION, IF ANY] constitute good and valuable consideration for the covenants herein.
E. Role gate. Ark. Code Ann. § 4-75-101 generally does not apply to a person holding a professional license under Title 17, Subtitle 3. A covenant restricting a physician's practice within the physician's scope of practice is void under § 4-75-101(k). Do not use this form for those roles.

NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, the Parties agree as follows.

TABLE OF CONTENTS

1. Definitions
2. Operative Provisions
3. Representations & Warranties
4. Covenants & Restrictions
5. Default & Remedies
6. Risk Allocation
7. Dispute Resolution
8. General Provisions
9. Execution Block

1. DEFINITIONS

For purposes of this Agreement, capitalized terms have the meanings set forth below.

1.1 “Affiliate” – any entity controlling, controlled by, or under common control with a Party.
1.2 “Business” – as defined in Recital A.
1.3 “Cause” – [DEFINE OR CROSS-REFERENCE EMPLOYMENT AGREEMENT].
1.4 “Competing Business” – any person or entity that engages in the Business (or substantially similar activities) within the Restricted Territory during the Restricted Period.
1.5 “Confidential Information” – all non-public information regarding Employer’s business, including Trade Secrets, customer lists, pricing, financial data, and marketing plans.
1.6 “Protected Work Product” – all inventions, works of authorship, developments, or improvements conceived or created by Employee in connection with employment.
1.7 “Restricted Period” – the period beginning on the Date of Termination and ending [UP TO 24] months thereafter. A two-year post-termination restriction is presumptively reasonable under Ark. Code Ann. § 4-75-101(d), subject to the facts and Employer's protectable interest.
1.8 “Restricted Territory” – [SPECIFIC GEOGRAPHIC AREA OR CUSTOMER-BASED SCOPE], no broader than necessary to protect the identified interest.
1.9 “Trade Secrets” – information meeting the definition of a trade secret under Arkansas law and maintained as such by Employer.
1.10 “Date of Termination” – the date Employee's employment with Employer ends for any reason.

2. OPERATIVE PROVISIONS

2.1 Employment Relationship. Unless otherwise provided in a separate written agreement, employment is at will.

2.2 Consideration. Employee acknowledges that the consideration described in Recital D is sufficient to support the covenants herein.

2.3 Condition Precedent. The enforceability of Section 4 is conditioned upon Employer’s delivery of the consideration set forth in Section 2.2.

3. REPRESENTATIONS & WARRANTIES

3.1 Authority. Each Party has full power to execute and perform this Agreement.

3.2 No Conflicts. Employee is not bound by any prior agreement that conflicts with Employee’s obligations hereunder.

3.3 Accuracy of Information. All information supplied by Employee in connection with hiring is true and complete.

3.4 Survival. The representations and warranties in this Section 3 survive termination of employment.

4. COVENANTS & RESTRICTIONS

4.1 Non-Competition. During the Restricted Period, Employee shall not, within the Restricted Territory, directly or indirectly:
a. perform the following services for a Competing Business: [DESCRIBE SERVICES EMPLOYEE MATERIALLY PERFORMED FOR EMPLOYER]; or
b. own or control a Competing Business principally to perform those services.

Passive ownership of less than [2]% of a publicly traded company is excluded.

4.2 Non-Solicitation of Customers. During the Restricted Period, Employee shall not solicit competitive business from a customer with whom Employee had material contact during the [12] months preceding the Date of Termination. This customer-based scope must remain no broader than necessary to protect Employer's interest.

4.3 Non-Solicitation of Personnel. During the Restricted Period, Employee shall not directly solicit an employee with whom Employee worked materially during the last [12] months of employment to leave Employer for a Competing Business. Ark. Code Ann. § 4-75-101(i) leaves employee nonsolicitation agreements to existing common-law standards, so Arkansas counsel must review this clause separately.

4.4 Confidentiality. Employee shall hold all Confidential Information in strictest confidence and use it solely for Employer’s benefit.

4.5 Non-Disparagement. Employee shall not make any false or disparaging statements regarding Employer or its Affiliates.

4.6 Return of Property. Upon Employer’s request or upon termination of employment, Employee shall immediately return all Employer property and documents (tangible or electronic).

4.7 Works Made for Hire. All Protected Work Product is “work made for hire”; to the extent not so deemed, Employee hereby assigns all right, title, and interest therein to Employer.

4.8 Monitoring. Employer may reasonably monitor compliance and require written certification thereof.

4.9 Reformation. If a restriction is unreasonable and broader than necessary, Ark. Code Ann. § 4-75-101(f) directs the court to reform and enforce it under reasonable terms. This clause does not invite deliberate overbreadth.

5. DEFAULT & REMEDIES

5.1 Events of Default. Any breach of Sections 3 or 4 constitutes an “Event of Default.”

5.2 Notice & Cure. Employer may, but need not, allow up to ten (10) days to cure a breach susceptible of cure; no cure period applies to breaches of Sections 4.1–4.5 or misappropriation of Trade Secrets.

5.3 Injunctive Relief. Employer may seek appropriate injunctive relief. For a preliminary injunction, immediate harm associated with breach is considered irreparable under Ark. Code Ann. § 4-75-101(e)(2), but all other defenses remain available and any security requirement is governed by applicable procedure.

5.4 Damages. Employer may seek damages for breach to the extent proved and permitted by Ark. Code Ann. § 4-75-101(e) and other applicable law.

5.5 Attorneys’ Fees. The prevailing Party may seek reasonable attorneys' fees and costs under this contractual provision only to the extent enforceable under applicable law.

5.6 No Automatic Tolling. The Restricted Period is not automatically extended by this form. Any equitable extension requires a lawful order.

6. RISK ALLOCATION

6.1 No Automatic Risk Transfer. This Agreement creates no employee indemnity, uncapped-liability declaration, insurance obligation, or predetermined damages measure.

7. DISPUTE RESOLUTION

7.1 Governing Law. Arkansas law (without regard to conflict-of-laws rules) governs this Agreement.

7.2 Forum Selection. The state courts located in [COUNTY], Arkansas have exclusive jurisdiction, subject to Section 7.3.

7.3 Arbitration (Optional).
[SELECT ONE & DELETE THE OTHER]
a. Arbitration Elected. Disputes shall be resolved by confidential, binding arbitration under AAA Employment Arbitration Rules before a single arbitrator; judgment may be entered on the award.
b. Arbitration Declined. Disputes shall remain in the courts designated in Section 7.2.

7.4 Jury Waiver (Optional). [IF ELECTED] THE PARTIES WAIVE THEIR RIGHT TO A TRIAL BY JURY.

7.5 Provisional Remedies. Either Party may seek provisional equitable relief in any court of competent jurisdiction.

8. GENERAL PROVISIONS

8.1 Amendment & Waiver. Must be in a written instrument signed by both Parties.

8.2 Assignment. Employee may not assign this Agreement; Employer may assign to an Affiliate or successor.

8.3 Successors & Assigns. This Agreement binds and benefits the Parties and their successors and permitted assigns.

8.4 Severability; Blue-Pencil. If any provision is unenforceable, it will be reformed or severed, and the remainder enforced.

8.5 Integration. This Agreement is the entire agreement regarding the subject matter and supersedes all prior understandings.

8.6 Counterparts; Electronic Transactions. Executable in counterparts. The Parties agree to conduct this transaction electronically. Under Ark. Code Ann. §§ 25-32-103, 25-32-105, 25-32-107, and 25-32-109, a covered record or signature may not be denied legal effect solely because it is electronic; attribution and effect remain subject to the act of the person, context, the Parties' agreement, other applicable law, and the Act's scope exclusions.

8.7 Headings. Headings are for convenience only and do not affect interpretation.

8.8 Construction. Both Parties had an opportunity to consult counsel. Nothing in this clause overrides otherwise applicable construction rules.

9. EXECUTION BLOCK

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.

[SIGNATURE PAGE TO EMPLOYEE NON-COMPETITION AGREEMENT]

Sources and References

• Arkansas Act 921 of 2015 (original statutory framework): https://www.arkleg.state.ar.us/Home/FTPDocument?path=%2FACTS%2F2015%2FPublic%2FACT921.pdf
• Arkansas Act 232 of 2025 (professional-license scope and physician prohibition; approved March 4, 2025): https://arkleg.state.ar.us/Home/FTPDocument?path=%2FACTS%2F2025R%2FPublic%2FACT232.pdf