Non-Compete Agreements Under Arizona Law

By Lindsay G. Leavitt

The first porridge in Goldilocks and the Three Bears was too hot, the second was too cold and the third was just right. Non-compete agreements under Arizona law follow a similar vein: some are too broad, some are too narrow, and some are just right.

Although Arizona law recognizes the need to protect legitimate business interests, it also hesitates to restrict individuals from pursuing their chosen careers. A well drafted non-compete agreement can successfully balance the interests of both the employer and employee.

A non-compete agreement is unreasonable and will not be enforced if (1) the restraint is greater than necessary to protect the employer’s legitimate interest; or (2) that interest is outweighed by the hardship to the employee and the likely injury to the public

In October 2013, the Arizona Court of Appeals held that a non-compete agreement between a public relations company and its former president, Ann Noder, was overbroad and therefore unenforceable. Orca Communications Unlimited, LLC v. Noder, 233 Ariz. 411, 314 P.3d 89 (App. 2013). The agreement prohibited Noder from directly or indirectly advertising, soliciting, or providing “Conflicting Services” within a “Restricted Territory” for eighteen months after her employment had ended. The court found that the restrictive covenants protected more than Orca’s legitimate business interests because it prevented Noder from pursuing any type of work in the public relations industry, even work that would be based on her skill and talents and not merely confidential information or customer relationships. The court refused to rewrite the provisions to make them enforceable, thus freeing Noder to immediately compete against her former employer.

A valid non-compete agreement cannot be copied and pasted from a preexisting template. Each industry and business has unique circumstances and interests that must be considered when drafting an effective and enforceable non-compete agreement.

Seeking the advice of competent legal counsel can give employers the confidence to avoid the trial and error method of Goldilocks – ensuring that their non-compete agreements will be “just right.”

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Jennings Strouss Attorneys Recognized in 2014 Washington DC Super Lawyers®

Washington, D.C. (May 5, 2014) – Jennings, Strouss & Salmon, PLC announced that Debra D. Roby, Joel L. Greene, Alan I. Robbins and Deborah A. Swanstrom have been listed in the 2014 Washington DC Super Lawyers^® in the area of Energy and Natural Resources.

Roby is Chair of the firm's Energy practice group and has extensive experience representing clients before the Federal Energy Regulatory Commission (FERC) and related courts. She counsels clients on a variety of energy matters, including electric transmission access and rate proceedings, regional transmission organizations, organized electric power markets, hydroelectric licensing and compliance, contract negotiations, complaint proceedings, NERC reliability compliance, audits and appeals, and other matters.  

Greene has more than 35 years assisting clients in energy regulatory matters, legal strategic planning, contract negotiations and advocacy before FERC, U.S. Department of Transportation, state commissions, and the courts. Greene is very active in the energy industry, having served on the North American Energy Standards Board and as an officer of the Energy Bar Association. In addition, he served as chair of the International District Energy Association (IDEA) and is currently the association’s legal counsel.

Robbins is an experienced energy lawyer and administrative litigator before the FERC and related courts. For over 30 years, Robbins has helped his clients navigate a broad range of energy issues, including restructuring of the electric industry and the development electric power markets, traditional electric rate matters, utility merger proceedings, contract negotiations, hydropower licensing, project development, and overall business strategies. His clients include municipal joint action agencies, generation and transmission cooperatives, a state utility commission, individual municipal and cooperative electric systems, larger end-users, and other market participants.

Swanstrom has more than 25 years of experience representing clients from diverse segments of the electric and natural gas industries on regulatory matters related to ratemaking, open access, transmission projects, renewable generation projects, and energy trading.  Swanstrom counsels clients on FERC and Commodity Futures Trading Commission (CFTC) regulations, reliability standards developed by NERC and regional entities, and compliance with the Dodd-Frank Act, Federal Power Act and Natural Gas Act.   She has represented government and investor-owned electric utilities, investors in generation and transmission projects, industrial electricity consumers, state and local regulators, gas pipelines, local distribution companies, and producers and marketers.

The selections for the top attorneys in Washington, DC are made by the research team at Super Lawyers, which is a service of the Thomson Reuters Legal Division based in Eagan, MN. Each year, the research team undertakes a rigorous multi-phase selection process that includes a survey of attorneys, independent evaluation of candidates by the attorney-led research staff, a peer review of candidates by practice area, and a good-standing and disciplinary check. Only five percent of attorneys are named by Super Lawyers.

About Jennings, Strouss & Salmon

Jennings Strouss & Salmon is one of the Southwest's leading law firms, providing legal counsel for over 70 years through its offices in Phoenix, Peoria, and Yuma, Arizona; and Washington, D.C. The firm's primary areas of practice include agribusiness; bankruptcy, reorganization and creditors’ rights; construction; corporate and securities; employee benefits and pensions; energy; family law and domestic relations; health care; intellectual property; labor and employment; litigation; real estate; surety and fidelity; tax; and trust and estates. For additional information please visit www.jsslaw.com and follow us on LinkedIn, Facebook and Twitter.

The firm’s affiliate, B3 Strategies, assists clients with lobbying and public policy strategy at the local, state, and federal levels. For more information please visit www.b3strategies.com.

~JSS~

Contact:  Dawn O. Anderson  |  danderson@jsslaw.com|  602.495.2806