§ 1. Governing Statutory & Common Law Authority
The enforceability of non-competition agreements in Arkansas is governed by Ark. Code § 4-75-101. Non-competes enforceable if reasonable. Arkansas is a red-pencil state — if any provision is overbroad, the entire clause may be voided.
§ 2. Compensation Threshold Requirements
Arkansas 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
Arkansas does not codify a maximum duration. Courts look at reasonableness; 2 years generally upheld. 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 (Red Pencil Doctrine)
Arkansas applies the red pencil doctrine: if any provision is unreasonable, the entire non-compete is void. Courts will not rewrite the agreement. This places the drafting burden on employers and can benefit employees challenging overbroad restrictions.
§ 5. Consideration & Contract Formation
New employment or continued employment. Whether this is legally sufficient — especially for agreements presented mid-employment rather than at hiring — is frequently contested.
§ 6. Effect of Involuntary Termination
Termination without cause may weaken enforceability. Courts may apply heightened scrutiny when the employer initiated the termination, particularly for termination without cause or mass layoffs.
Practitioner Notes
Red-pencil doctrine makes overbroad clauses riskier for employers.