Employee Agreement includes non-compete clause. Is non-compete reasonable and/or enforcable?

I live in NJ but have been offered employemnt by a company in Arizona. Employment Agreement they are requiring me to sign as condition of employment, includes confidentiality and intellectual property protection clauses that seem reasonable but the non-compete seems inappropriate and too broad. It reads: "14. Competitive Employment
In order to protect the Company’s Confidential Information and other business interests, for a period of (1) year after termination of my employment I will not directly or indirectly compete with the Company as an employee, independent contractor, consultant, director, owner, or part owner anywhere in the United States."

Can an employer prevent me from taking another job? Is this reasonable? How should I recommend they change the language, assuming they are willing to do so?

1 answer  |  asked Nov 13, 2009 11:32 AM [EST]  |  applies to Arizona

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Answers (1)

Francis Fanning
Arizona law limits non-compete agreements to those that are necessary to protect legitimate interests of employers, and they must be reasonably limited in time and geographic scope. Whether the agreement is necessary, whether one year is reasonable and whether an agreement that covers the entire country is reasonable are all questions that depend upon the nature of the job and the industry.
I would not recommend that you change the language, since that will only serve to make it more easily enforceable. Before negotiating with the prospective employer over the non-compete, you should have it reviewed by an experienced employment attorney and discuss the practical as well as legal issues that these agreements present. These agreements often create a stumbling block when you seek other employment, regardless of whether they are enforceable.

posted by Francis Fanning  |  Nov 13, 2009 5:12 PM [EST]

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