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Restrictive Covenants

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.

What others are saying about us
  • "I would recommend Mr. Hudspeth unequivocally. Not only is he an outstanding business attorney, he also provided me with access to a divorce attorney. Thanks to his skill, and resources available outside the Phoenix law family, I was successful in challenging a “family law” mediation that was particularly and grossly unfair." - Chandler, Arizona Private Individual

  • "Thank you for the work you have done in creating these documents. It is always a pleasure dealing with this firm!" - J. P.

  • "An excellent response. Masterfully prepared. Thank you." - El Paso, Texas Real Estate Investor

  • "Glad about meeting with Don. Felt so much better, better than in 15 years. Really appreciated the conversation." - RH, Phoenix Manufacturing Company

Donald W. Hudspeth Attorney Photo
Donald W. Hudspeth
Principal Attorney

Attorney Donald W. Hudspeth has more than twenty years’ experience practicing corporate and business law. Before attending law school, Mr. Hudspeth held a stock brokers license at the age of 21 and owned his own business at the age of 23. He was a business law professor at Arizona State University, West Campus, and has conducted classes and seminars for a number of higher institutions and organizations. Mr. Hudspeth has published two books on law and is the founder of the radio programs Law on the Edge and Law Talk.

Mark S. Hamilton Attorney Photo
Mark S. Hamilton
Attorney

About Attorney Mark S. Hamilton has experience handling all aspects of civil and commercial litigation in federal, state, and tribal courts at the trial and appellate levels. Practice Areas Business litigation Commercial litigation Education University Of Hawaii Wm. S. Richardson School Of Law, Juris Doctor - 2002 University Of Hawaii, Master Of Arts In Asian…

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Our firm now offers a scholarship program for ASU first and second year law students.

The scholarship is awarded to students for academic merit with an interest in business and business law. Candidates may have majored in fields other than business, have taken a break between college and law school, or have had exceptional life experiences.

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