Phoenix Restrictive Covenants Lawyers Safeguard Business Interests
Arizona attorneys use well-designed contract provisions to prevent abuses
Success in business often depends on practices and trade secrets developed through years of hard work. It can be disconcerting as a business owner when your former managers and other employees take advantage of them and turn them against you in their next job or a business they start to compete with yours. While the law places limits on what you can do to stop it, the knowledgeable and experienced Arizona business attorneys of the Law Offices of Donald W. Hudspeth, P.C. in Phoenix can craft carefully structured restrictive covenants that give you effective protection while also passing legal muster.
What can we do for you?
A restrictive covenant in the employment law context is a contractual provision that restrains the ability of an employee to compete with their former employer or use the former employer’s trade secrets and confidential information against it. It is best to require employees to sign restrictive covenants as soon as they join your company, and certainly before they are ready to leave. Courts are wary of restrictions on people’s ability to earn a living and the law imposes limits on what businesses can do to restrict their ex-employees’ careers. Many restrictive covenants are too broad to meet these legal requirements and may therefore prove useless when they are most needed. We understand these legal restrictions, keep abreast of the latest decisions and use these insights to determine how best to strike a proper balance to protect our business clients.
Types of restrictive covenants
There are three types of provisions we can include in restrictive covenants:
- Non-compete agreement — This restricts the ability of your ex-employees to compete with you, either as the owner of another business or an employee of a rival firm.
- Non-solicitation agreement — This restricts the ability of your ex-employees to contact your customers for the purpose of soliciting their business.
- Non-disclosure agreement — This prohibits your ex-employees from disseminating confidential customer information and other trade secrets.
Because they have the most general effect on the ex-employee’s ability to work, non-compete agreements are subject to the strictest review during enforcement actions. These covenants must be limited with respect to what work an ex-employee can’t do, in what geographical area and for what period of time. Non-solicitation agreements may not prohibit ex-employees from soliciting customers for products and services that the business does not offer. They also cannot prohibit customers from doing business with your ex-employee without being solicited. Non-disclosure agreements must specifically and accurately identify what is, and what is not, a trade secret. We are familiar with the legal requirements for all of these provisions.
Enforcement of a restrictive covenant in Arizona
If your ex-employee violates a valid restrictive covenant, we will take action to stop it. The first step is a cease-and-desist letter to the violator, but if that proves insufficient, our skilled business litigators will go to court. Potential remedies we can seek for you include:
- A temporary restraining order or injunction prohibiting violations while the case is pending
- A permanent injunction against the violation
- Reasonable damages for your business’ losses as a result of the violation
We will take whatever measures are appropriate to see that your former employee honors the agreement they signed.
Contact a dedicated Phoenix business lawyer regarding a restrictive covenant
Law Offices of Donald W. Hudspeth P.C. assists Arizona businesses with the development and enforcement of restrictive covenants. To schedule a consultation, call our Phoenix firm today at 866-696-2033 or contact us online.