Are Non-Compete Agreements Enforceable in Arkansas?

In today’s business climate, non-compete agreements are increasingly used and getting harder to circumvent when needed. Suppose you’ve signed a non-compete agreement in Arkansas. In that case, you may have severely limited your chances of getting a new and better position in the same or even closely related industry.

Recently, Arkansas has enacted some new laws that increase the enforceability of non-compete agreements. These new laws make some significant changes that make these agreements even more enforceable.

Accordingly, many Arkansas employers are re-evaluating their current non-compete agreements to ensure they are maximizing all the new protections afforded them under the recent state changes.

For example, some employers increase the geographic limitations when necessary to increase restrictions given their local or state-wide business interests.

Additionally, some companies are considering whether they can increase the time limit for their non-compete agreements and increase them beyond the typical two-year period.

There are many changes that employers, and their lawyers, are considering. Still, almost across the board, the new Arkansas non-compete laws make these agreements even more enforceable than they were before.

The Arkansas courts have made it abundantly clear that restrictive non-compete agreements (or “covenants”) are enforceable if the terms are reasonable and necessary to protect the employer’s business interests.

These “interests” may include specialized training, proprietary trade secrets, confidential information and tactics, customer information and lists, and more.

The term “reasonableness” is vital to you as an employee. It should refer to any hardship the non-compete agreement puts on you, its effect on the public, the restrictions placed on time, and geographical territory.

Suppose you are asked to sign a non-compete agreement as part of your hiring contract or employment. In that case, it’s always wise to obtain the opinions and guidance of a local Bryant or North Little Rock employment law team to protect your interests.

Always remember that in any contractual arrangement (including hiring contracts and non-compete agreements), you, and your employer, must be giving and receiving something of value. However, the  Arkansas courts determined that the offer of initial or continued employment is sufficient consideration to you (as the employee) to agree not to compete with the employer should the employment relationship terminate.

Of course, you are aware that any non-compete agreement put before you will benefit your employer and was drafted by their lawyer for that purpose. Therefore, you must get the advice of your employment law team so your rights also are protected and served.

What Are Some Examples of “Reasonable” Terms In an Arkansas Non-Compete Agreement?

Even though the new Arkansas Laws about non-compete agreements have been strengthened in most cases, there are still ways the courts may deem them unenforceable. For example, if the Arkansas court finds that they are unreasonable in terms of duration, geographic scope, and the type of employment or line of business being restricted.

Some general examples of what the Arkansas courts have found to be “reasonable” terms in the non-compete agreement  include:

  • A 1-year restriction on any insurance agent to stop them from soliciting, accepting, or servicing any policy holder of the former employer. They did this  because the former employer’s market share was only 7% which left the agent 93% of the business for the agent to solicit in their geographical area.
  • A 200-mile and a 2-year restriction against an insurance agent because he was given special training and access to confidential, valuable business information.
  • A 1-year, 4-county local restriction on a former food products salesperson.
  • A 2-year statewide restriction on a salesperson of a school supply business.

These “reasonable” covenants can vary enormously and, of course, would be influenced by your profession, geographical location, company position, and many more pertinent facts concerning your job.

It may be challenging, but you and your Conway or Fayetteville employment lawyer always have the right to contest any part of your employment or non-compete agreement you may find troubling. Due to the non-compete’s current enforceability, your employment law team will always attempt to protect your right to earn a living for you and your family.

What Are Some Examples of “Unreasonable” Restrictive Covenants?

Even though the current laws may favor your employer’s non-compete agreement, there are situations where the Arkansas courts have found some to be too restrictive.

Some examples are:

  • A 2-year, 39-county restriction on a cattle and dairy cow liquid feed supplier salesperson. This restriction would severely pact the former employee’s ability to earn a living.
  • A 9-state restriction against a former employee of a distribution company, but the former employee had not worked in all nine states.  This restriction was not reasonably needed to protect the former employer’s business interests.
  • A 2-year, 75-mile restriction against a cardiologist. In this case, the geographic scope would harshly limit the doctor from practicing in their current location.

Your knowledgeable employment lawyer will advise you that these restrictive covenants can be tricky for both you and your new employer. There are cases where your new employer can be liable to your former employer if hiring you violates an agreement. If you have any questions pertaining to your non-compete agreement (before or after you sign it), the advice and guidance of your Bryant employment lawyer will be invaluable.

Are There Any Ways I Can “Get Around” a Non-Compete Agreement?

First, every non-compete agreement is unique to you, your job, and the industry in which you work. Every case must be evaluated by your experienced employment law team differently. Still, specific general clauses of these agreements can be used by your lawyer to protect your interests and livelihood.

Just a few of these legal means that could circumvent your non-compete agreement are:

  • Being able to prove that your employer is in breach of contract.
  • Proving that there is no valid legitimate interest to enforce the non-compete agreement.
  • Prove the agreement’s time frame is unreasonable.
  • Prove that the so-called “confidential information” you had access to is not proprietary or “special” in any way.

Your thorough and competent Arkansas employment lawyer will always analyze your case and the basis of your non-compete agreement and use that information to provide you with the best argument possible.

I Need to Fight an Arkansas Non-Compete Agreement; How Should I Proceed?

Most importantly, your employer will have their lawyers fighting for them, make sure you have an aggressive, professional legal council protecting your interests. It’s never wise to attempt to fight any non-compete agreement on your own.

Your local Bryant, Conway, or North Little Rock employment lawyer has a thorough and intimate understanding of the judges in your area, how they approach these cases and the status of all the new laws in Arkansas.

Your aggressive employment law team will use this local knowledge to your advantage when presenting and fighting your case. Consult your lawyer immediately, as your livelihood and family’s income may depend on it.