An Arkansas Non-Compete Agreement is a contract that protects the employer and prohibits employees from revealing proprietary information during or after employment in the state of Arkansas.
Reasonable Uses and Objections
- 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.
Legally Enforceable in Arkansas?
Yes, Arkansas non-compete agreements are enforceable. Under Ark. Code § 4-75-101(a), courts will uphold a non-compete agreement that serves as a stipulation for employment. 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.
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, the agreements must provide a clear and reasonable time and scope to be enforceable.
Factors to consider include:
- What is the nature of the employer’s business interests?
- Is the geographic scope feasible?
- Is the restriction limited to a 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 that employers cannot defend in court.
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
- any data an employer would reasonably seek to protect from a competitor.
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.
Arkansas law does not specify a specific geographical limitation. However, individual agreements typically include a geographical scope coinciding with the interests of the business. The agreement must relate to the company’s business interests and have a feasible geographic scope.
Below, you can download a free Arkansas Non-Compete Agreement template in PDF and Word format.