NON-COMPETE AGREEMENT
(Arizona – Comprehensive Template)
[// GUIDANCE: This is a sophisticated, court-ready template drafted for use with Arizona employees. All bracketed terms MUST be customized before execution. Citations have been omitted in accordance with best-practice risk-management standards.]
TABLE OF CONTENTS
- I. Document Header
- II. Definitions
- III. Operative Provisions
- IV. Representations & Warranties
- V. Covenants & Restrictions
- VI. Default & Remedies
- VII. Risk Allocation
- VIII. Dispute Resolution
- IX. General Provisions
- X. Execution Block
I. DOCUMENT HEADER
1.1 Title and Parties
This Non-Compete Agreement (this “Agreement”) is made and entered into as of [Effective Date] (the “Effective Date”) by and between [Legal Name of Employer], a [State of Formation] [type of entity] with its principal place of business at [Address] (“Employer”), and [Employee Full Legal Name], an individual residing at [Address] (“Employee”) (each, a “Party,” and collectively, the “Parties”).
1.2 Recitals
A. Employer is engaged in the business of [brief description] (the “Business”).
B. Employee is or will be employed by Employer in the position of [Position Title] and will have access to Confidential Information (as defined below) and substantial relationships with Employer’s clients, vendors, and employees.
C. Employer desires to protect its legitimate business interests and goodwill, and Employee desires to accept reasonable restrictions on competition as a condition of employment and/or continued employment.
NOW, THEREFORE, in consideration of the mutual covenants herein and other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the Parties agree as follows:
II. DEFINITIONS
For purposes of this Agreement, the following terms shall have the meanings set forth below. Defined terms appear throughout this Agreement in bold italics. Any term used but not defined herein shall have its plain and ordinary meaning.
- “Affiliate” – any entity controlling, controlled by, or under common control with Employer.
- “Competing Business” – any person or entity that, during the Restricted Period, engages in all or any material part of the Business within the Restricted Territory.
- “Confidential Information” – information, whether or not in written form, that is proprietary to Employer or its Affiliates, including trade secrets, technical data, client lists, pricing, marketing plans, and all non-public information obtained by Employee in the course of employment.
- “Legitimate Business Interests” – Employer’s need to protect (i) trade secrets and Confidential Information; (ii) substantial client relationships and goodwill; and (iii) specialized training provided to Employee.
- “Restricted Period” – the period beginning on the Effective Date and ending [___] months after the termination of Employee’s employment for any reason.
- “Restricted Territory” – [e.g., a 50-mile radius of any location where Employer conducted the Business within the twelve (12) months preceding the termination date].
- “Services” – the duties Employee performed for Employer during the last twelve (12) months of employment or any substantially similar duties.
III. OPERATIVE PROVISIONS
3.1 Consideration
Employee acknowledges and agrees that the consideration for this Agreement includes:
a. Initial Employment / Continued At-Will Employment;
b. [Signing Bonus in the amount of $_____]; and
c. Access to Confidential Information and specialized training.
[// GUIDANCE: If Employee signs AFTER commencement of employment, include separate, adequate consideration such as a cash payment, equity grant, or promotion.]
3.2 Term of Employment
Nothing herein guarantees any minimum length of employment. Employment shall remain [at-will / as otherwise provided in separate Employment Agreement].
3.3 Condition Precedent
Execution and delivery of this Agreement is a condition precedent to Employee’s commencement or continuation of employment with Employer.
IV. REPRESENTATIONS & WARRANTIES
4.1 Mutual Authority. Each Party represents that it has full authority to enter into and perform this Agreement.
4.2 Employee Capacity. Employee represents that (i) Employee is not a party to any agreement that would conflict with or be violated by the execution of this Agreement, and (ii) Employee has not misappropriated any confidential information of a prior employer.
4.3 Employer Disclaimers. Employer makes no representation regarding the duration of Employee’s employment or any future compensation.
4.4 Survival. The representations and warranties contained in this Article IV shall survive termination of this Agreement to the fullest extent necessary to enforce the Parties’ rights.
V. COVENANTS & RESTRICTIONS
5.1 Non-Competition
Employee shall not, during the Restricted Period, within the Restricted Territory, directly or indirectly:
a. Own, manage, operate, control, or participate in the ownership, management, operation, or control of a Competing Business;
b. Perform the Services (or services substantially similar to the Services) for a Competing Business; or
c. Assist any Competing Business in any capacity that would inevitably require disclosure or use of Confidential Information.
[// GUIDANCE: Arizona courts require temporal and geographic limits “no broader than necessary.” Customize the Restricted Period and Restricted Territory to reflect actual protectable interests.]
5.2 Non-Solicitation of Customers
For the Restricted Period, Employee shall not, directly or indirectly, solicit or divert any customer or prospective customer with whom Employee had material contact during the last twelve (12) months of employment for purposes of providing products or services that compete with the Business.
5.3 Non-Solicitation of Employees
For the Restricted Period, Employee shall not, directly or indirectly, solicit or induce any employee, consultant, or contractor of Employer to terminate or lessen such person’s relationship with Employer.
5.4 Confidentiality
Employee shall at all times maintain the confidentiality of Confidential Information and shall not disclose or use Confidential Information except as necessary to perform Employee’s duties for Employer.
5.5 Return of Property
Upon termination of employment or upon Employer’s request, Employee shall promptly return all property and Confidential Information of Employer in Employee’s possession or control.
VI. DEFAULT & REMEDIES
6.1 Events of Default
Any breach by Employee of Articles V or VII shall constitute an “Event of Default.”
6.2 Notice and Cure
Upon an Event of Default, Employer shall provide written notice to Employee specifying the nature of the breach. Unless the breach involves the misappropriation of Confidential Information or competitive activity (which by its nature is not curable), Employee shall have five (5) calendar days after receipt of such notice to cure the breach.
6.3 Injunctive Relief
Employee acknowledges that monetary damages would be inadequate to compensate Employer for a breach of this Agreement. Accordingly, Employer shall be entitled to seek immediate temporary, preliminary, and permanent injunctive relief in any court of competent jurisdiction without the necessity of posting bond, in addition to any other remedies available at law or in equity.
6.4 Cumulative Remedies
All rights and remedies of Employer under this Agreement are cumulative and in addition to any other rights or remedies afforded by law or equity.
6.5 Attorneys’ Fees
In any action to enforce this Agreement, the prevailing Party shall be entitled to recover its reasonable attorneys’ fees, costs, and expenses.
VII. RISK ALLOCATION
7.1 Indemnification by Employee
Employee shall indemnify, defend, and hold harmless Employer and its Affiliates, and their respective officers, directors, employees, and agents (collectively, “Indemnified Parties”), from and against any and all losses, damages, liabilities, deficiencies, and expenses (including reasonable attorneys’ fees) arising out of, resulting from, or related to any breach by Employee of this Agreement.
7.2 Limitation of Liability
The indemnification obligation in Section 7.1 is uncapped. Nothing in this Agreement limits Employer’s right to obtain injunctive relief.
7.3 Insurance
[Optional] Employee shall, upon Employer’s request, maintain professional liability insurance with minimum limits of $[___] per occurrence.
[// GUIDANCE: Typically not required for employees, but insert for high-level executives if appropriate.]
7.4 Force Majeure
Neither Party shall be liable for failure to perform if such failure is due to acts of God, strike, fire, epidemic, or other causes beyond the Party’s reasonable control; provided, however, that this Section 7.4 does not excuse Employee from the restrictive covenants set forth in Article V.
VIII. DISPUTE RESOLUTION
8.1 Governing Law
This Agreement and any dispute arising hereunder shall be governed by and construed in accordance with the laws of the State of Arizona, without regard to its conflicts-of-law principles.
8.2 Forum Selection
Subject to Section 8.3 (Arbitration), the Parties consent to the exclusive jurisdiction of the state courts located in [County, Arizona] and waive any objection to venue therein.
8.3 Arbitration (Optional)
[OPTION 1 – INCLUDE]
Any dispute (except for actions seeking injunctive relief under Section 6.3) shall be resolved by binding arbitration administered by the [American Arbitration Association] under its Employment Arbitration Rules. The arbitration shall take place in [City, Arizona] before a single arbitrator. Judgment upon the award may be entered in any court of competent jurisdiction.
[OPTION 2 – OMIT]
[// GUIDANCE: Delete 8.3 in its entirety if the Parties prefer court litigation only.]
8.4 Jury Trial Waiver (Optional)
To the fullest extent permitted by law, the Parties knowingly, voluntarily, and irrevocably waive their right to a trial by jury in any action or proceeding arising under this Agreement.
[// GUIDANCE: Arizona permits contractual jury waivers; ensure conspicuous formatting.]
8.5 Equitable Relief Preservation
Nothing in this Article VIII shall limit Employer’s right to seek equitable relief in a court of competent jurisdiction as provided in Section 6.3.
IX. GENERAL PROVISIONS
9.1 Amendment and Waiver
No amendment or waiver of any provision of this Agreement shall be effective unless in a writing signed by both Parties and, in the case of Employer, approved by an authorized officer. A waiver on one occasion shall not constitute a waiver on any subsequent occasion.
9.2 Assignment
This Agreement is personal to Employee and may not be assigned by Employee. Employer may freely assign this Agreement to any Affiliate or successor by operation of law or otherwise.
9.3 Successors and Assigns
This Agreement shall inure to the benefit of and be binding upon the Parties and their respective successors and permitted assigns.
9.4 Severability; Blue-Pencil
If any provision of this Agreement is found unenforceable by a court of competent jurisdiction, the court shall modify the provision to the minimum extent necessary to render it enforceable (blue-pencil), and the remaining provisions shall remain in full force and effect.
9.5 Integration
This Agreement, together with any confidentiality or invention assignment agreement executed by Employee, constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior or contemporaneous oral or written understandings.
9.6 Counterparts; Electronic Signatures
This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which, taken together, shall constitute one instrument. Signatures transmitted via facsimile, PDF, or other electronic means shall be deemed original signatures for all purposes.
X. EXECUTION BLOCK
IN WITNESS WHEREOF, the Parties have executed this Non-Compete Agreement as of the Effective Date.
EMPLOYER
[Legal Name of Employer]
By: ____
Name: ____
Title: _____
Date: _________
EMPLOYEE
[Employee Full Legal Name]
Date: _____
[// GUIDANCE: Arizona does not mandate notarization for a non-compete, but notarizing may bolster evidentiary weight. Insert notary block below if desired.]
NOTARY ACKNOWLEDGMENT (Optional)
State of Arizona )
County of __ )
On this ___ day of _, 20_, before me, the undersigned Notary Public, personally appeared _________, who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged that he/she executed the same for the purposes therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
Notary Public
My Commission Expires: ____
[// GUIDANCE: Final checklist for counsel
1. Confirm Restricted Period and Territory are narrowly tailored.
2. Verify adequate consideration (especially for current employees).
3. Decide whether to include arbitration and/or jury waiver.
4. For multi-state employees, consider separate state riders.
5. Provide a signed copy to Employee and retain one in personnel file.]