Arkansas Noncompete Agreements
Noncompete agreements are typically referred to as covenants not to compete. These agreements come in two forms: (1) prohibit an employee from competing with the former employer for an amount of time after the employment is terminated; or (2) prohibit the seller of a business from competing with the buyer for an amount of time after the sale. Arkansas law is more favorable to the second form than the first. See Hyde v. CM Vending Co., Inc., 288 Ark. 218 (1986).
Arkansas law has three requirements for noncompete agreements to be enforceable: (1) there must be a valid interest to protect; (2) the geographical restriction must not be overly broad; and (3) a reasonable time limit must be imposed. See Statco Wireless, LLC v. Southwestern Bell Wireless, LLC, 80 Ark.App. 284 (2003).
Arkansas is not a blue pencil state--if one provision of the noncompete agreement fails, then the entire agreement fails. See Rector-Philips-Morse, Inc. v. Vroman, 253 Ark. 750 (1973).
