Most employers and employees are familiar with restrictive covenants. I am referring to confidentiality/trade secret provisions, non-compete provisions and non-solicitation provisions (if you don’t know what one or more of these provisions is used for and want to know, feel free to contact me). These type of provisions come up in contexts other than employment, such as when a business is sold, but the main place you probably will have encountered one is as an employee, employer or independent contractor.
For employers, it is important to have the agreements and contracts you use with employees and otherwise reviewed by an attorney annually to make sure changes in the law don’t require revisions or render some or all of a contract unenforceable. For employees, independent contractors, sellers or buyers it always is a good idea to have an attorney review these type of provisions or agreements at the time they are being negotiated. Or now, because the law change may affect enforceability of contracts to which you are a party too.
Based on an October 2013 Arizona Court of Appeals decision it makes sense for any person or business who is a party to a contract or agreement containing these type of provisions to have them reviewed by an attorney because the law has changed for now. How it may affect you depends on the specific provisions you have agreed to, no matter whether you are an employer, employee, independent contractor, seller, buyer, etc. I strongly suggest you make this part of your year-end planning heading into 2014 because of the change in the law. And make it part of the annual legal “check-up” you should be doing to protect yourself.
Let me know if you have any questions on this topic or want to schedule a time to review restrictive covenants in documents you use or are a party to.
