An Arkansas non-compete agreement involves an employee and an employer. It protects the employer and prohibits employees from revealing proprietary information during or after employment.
Learn what’s protected by Arkansas non-compete agreements and limitations to the law. In addition, you can quickly create a binding contract using our document builder.
Is a Non-Compete Legally Enforceable in Arkansas?
Yes, Arkansas non-compete agreements are enforceable. Under state law, courts will uphold a non-compete agreement that serves as a stipulation for employment. [1] It can also be part of a contract that protects the interests of a business employing a contractor. Learn more about what’s protected, reasonable use considerations, and relevant exemptions.
What’s Protected?
Non-compete agreements are meant to protect employers without placing an undue burden on former employees.
Non-compete agreements in Arkansas protect the following categories: intellectual property; trade secrets; goodwill with customers; customer lists; knowledge of business practices and methods; profit margins and costs; other information that is confidential, proprietary, and increases in value from not being known by a competitor; training and education; and any data an employer would reasonably seek to protect from a competitor.
Reasonable Use and Exemptions
In Arkansas, non-compete agreements are limited in time and scope. The state gives employers the right to protect their business interests without regard to geographical limitations. However, to be enforceable, the agreements must provide a clear and reasonable time and scope.
Factors to consider include:
- What is the nature of the employer’s business interests?
- Is the geographic scope feasible?
- Is the restriction limited to specific group of customers?
A two-year restriction is reasonable in most cases and exemptions include various professionals.
Non-compete agreements are enforceable in Arkansas, however, it’s important to avoid overly broad language employers cannot defend in court. Here are a few FAQs that can help employers better understand how these agreements work in Arkansas:
Enforceable when terminated without cause? – Not decided.
Employee non-solicitation agreement permitted? – Yes
Customer non-solicitation agreements permitted? – Yes
Does continuing employment equal sufficient consideration? – Yes
Non-Compete Agreement Arkansas Limitations
These agreements often prohibit employees from seeking employment with competitors for a certain length of time, and they sometimes specify a reasonable geographic region or enforceable period, which varies by state.
Limitations on time
The amount of time you will be restricted depends on the time specified in the non-compete agreement. It won’t always continue after termination.
Non-compete agreement Arkansas geographical limitations
Arkansas law does not specify a specific geographical limitation. However, individual agreements typically include a geographical scope coinciding with the interests of the business. Including this in the agreement may help employers defend their non-compete contracts when necessary. The agreement must specify the time and scope under which the agreement can be enforced. In any case, the agreement must relate to the company’s business interests and have a feasible geographic scope.
Arkansas Non-Compete Agreement Sample
Below, you can download a free Arkansas Non-Compete Agreement template in PDF and Word format.
