§ 1. Governing Statutory & Common Law Authority
The enforceability of non-competition agreements in Arizona is governed by Common law; A.R.S. § 23-494 (broadcast employees). Non-competes enforceable if ancillary to an employment relationship, reasonable in scope, and supported by consideration.
§ 2. Compensation Threshold Requirements
Arizona does not impose a minimum salary threshold for non-compete enforceability. This means non-competes may be enforced against employees at any income level, including hourly and part-time workers.
§ 3. Temporal Limitations on Post-Employment Restrictions
Arizona does not codify a maximum duration. Courts generally uphold up to 2 years. In practice, 1-2 years is generally considered the outer limit of reasonableness, though outcomes vary significantly based on the employee's role and access to trade secrets.
§ 4. Judicial Modification (Blue Pencil Doctrine)
Arizona follows the blue pencil doctrine: courts can narrow overbroad non-compete provisions rather than voiding the entire agreement. This means even a poorly drafted non-compete may be partially enforced after judicial modification.
§ 5. Statutory Exemptions & Carve-Outs
Arizona law exempts certain workers from non-compete enforcement:
- broadcast employees
§ 6. Consideration & Contract Formation
Continued employment or other consideration. Whether this is legally sufficient — especially for agreements presented mid-employment rather than at hiring — is frequently contested.
§ 7. Effect of Involuntary Termination
Involuntary termination may reduce enforceability. Courts may apply heightened scrutiny when the employer initiated the termination, particularly for termination without cause or mass layoffs.
Practitioner Notes
Broadcast employee exemption is notable.