Jackson Lewis: Arizona Court Holds Restrictive Covenants Unenforceable against Former Employee | Practical Law

Jackson Lewis: Arizona Court Holds Restrictive Covenants Unenforceable against Former Employee | Practical Law

This Law Firm Publication by Jackson Lewis LLP discusses the Arizona Court of Appeals' recent decision in Orca Communications Unlimited, LLC v. Noder, holding that restrictive covenants in an employment agreement were unenforceable because they were overbroad. The court held the agreement's confidentiality provision was overbroad because it covered public information and acted as a non-competition provision with no geographic restriction. The court also found that the actual non-competition and non-solicitation provisions were overbroad because they covered more than the employer's legitimate business interests. However, the court allowed claims for breach of the covenant of good faith and fair dealing, breach of the duty of loyalty, tortious interference and unfair competition to proceed as they were independent of the breach of contract claims and not preempted by the Arizona Uniform Trade Secrets Act.

Jackson Lewis: Arizona Court Holds Restrictive Covenants Unenforceable against Former Employee

by Jackson Lewis LLP
Published on 01 Nov 2013Arizona, United States
This Law Firm Publication by Jackson Lewis LLP discusses the Arizona Court of Appeals' recent decision in Orca Communications Unlimited, LLC v. Noder, holding that restrictive covenants in an employment agreement were unenforceable because they were overbroad. The court held the agreement's confidentiality provision was overbroad because it covered public information and acted as a non-competition provision with no geographic restriction. The court also found that the actual non-competition and non-solicitation provisions were overbroad because they covered more than the employer's legitimate business interests. However, the court allowed claims for breach of the covenant of good faith and fair dealing, breach of the duty of loyalty, tortious interference and unfair competition to proceed as they were independent of the breach of contract claims and not preempted by the Arizona Uniform Trade Secrets Act.