Loan Officers marketing Realtors

Hello! I have searched incessantly over the internet for a clear, concise answer to my question, and have found many conflicting answers. I am a loan officer in Phoenix, AZ and my employer wants me to sign a 6 month non-compete. Specifically, if I quit I may not market or accept business from any Realtors I have worked with in the past. Is this legal in AZ and if so, is this fair for my industry? I greatly appreciate your help!

1 answer  |  asked Aug 11, 2004 12:38 PM [EST]  |  applies to Arizona

Answers (1)

Francis Fanning
No simple answer to questions about non-competes

The reason you haven't found a simple answer to your question is because your question is not simple. Just because a question is clear and concise, that does not make it simple. "What is the meaning of life?" is a clear and concise question. But a clear and concise answer would be meaningless. Any simple answer you get off the internet may or may not apply to your situation.
First, the agreement you describe sounds like an anti-piracy agreement, not a non-compete. Without having the opportunity to review the entire agreement, I cannot give a very reliable answer to your question. Generally, anti-piracy agreements are not contrary to public policy and will be enforced according to their terms. Non-compete agreements are only enforceable if they are necessary to protect legitimate business interests and are reasonably restricted in length and geographic scope. The agreement you describe is not limited to a specific geographic area because it is not trying to keep you from working for any competitor of the bank, but only to keep you away from the bank's customers. The reason that non-compete agreements are sometimes unenforceable is because they prevent a person from being employed in an entire industry in which the person has experience. If your agreement does not prohibit you from leaving and going to work for the bank down the street, it doesn't have this undesirable effect. As a bank employee, you have no ownership interest in the customers you did business with, so an anti-piracy provision doesn't deprive you of anything, at least as far as the courts are concerned. Whether the agreement is fair for your industry depends upon which side of the agreement you are on, but fairness is not a legal test of the agreement's enforceability.

posted by Francis Fanning  |  Aug 11, 2004 4:57 PM [EST]

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