Arkansas Non-compete Agreement Template

The Arkansas Non-Compete Agreements (NCA) form is a legally binding document that establishes a covenant between two parties, usually a company and its employee. The most common terms of such a free non-compete agreement include the obligation not to compete after the parties effectively end the employment.

This means that a former company member cannot share sensitive business information with a third party or use it themselves for competitive purposes. For example, they cannot disclose any company’s trade secrets, sales lists, business practices, or intellectual property.

Of course, an NCA implies such restrictions as the prohibition to work for a competitor. However, the limitation is only valid for a certain period and within a particular geographical area. This restriction’s time and scope depend on a few factors connected to the company’s business type. Usually, an NCA stays effective for about two years.

If the employee breaches the agreement, they are financially responsible to the company and subject to legal sanctions. The penalty depends on the amount of damage caused by the violator, as determined by the court.

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Arkansas NCA Laws and Restrictions

The Arkansas Non-Compete Agreement compilation is regulated by the Arkansas Code (Title 4, Chapter 75, Subchapter 1). It comprises business and commercial laws, covers unfair practices that may occur in a corporate setting, and gives general provisions on how to act in a particular situation. Hereunder, we suggest you get acquainted with the Subchapter’s main points to get a broad understanding of the local norms:

1. An NCA is enforceable when it is ancillary to the employment relationship or included in an otherwise enforceable employment contract following:

  • the employer’s protected business interest
  • time and scope limitations; those shall not be any more restrictive than necessary to protect the company’s reputation and prevent leaks.

2. The employer’s protected business interest may include:

  • existing and potential sales lists
  • costs of the goods and services
  • profit margins
  • trade secrets
  • business practices and methods
  • other valuable commercial information

3. Time and scope of the agreement limitations may depend on:

  • the employer’s business interes;
  • the territory covered by employer’s business entities
  • customers or other entities the NCA restriction is limited to
  • the nature of the employer’s business

Apart from laws, there are some state restrictions on the enforcement of an NCA. As for Arkansas, since 2015, all non-compete agreements are not enforceable if an employee has a professional license in the medical field. You may refer to Section 4-75-101 of the Arkansas Code for more information.

If you need to fill out an NCA form, you can use our form-building software to construct the document quickly and effortlessly.

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Published: Feb 10, 2021