Contractors as Employers: Restrictive Covenants in Employment Agreements

With the constant emergence of new technologies/business practices and an increasingly mobile workforce, some companies in the construction industry rely on restrictive covenants in employment agreements to safeguard their competitive advantages.  The term “restrictive covenants” typically encompasses contractual provisions that:  (1) require information to be kept confidential; (2) limit competition; and (3) limit the solicitation of customers.  The Arizona Court of Appeals recently addressed how far companies can go in restricting the competitive activities of former employees in Orca v. Noder.  For an explanation of the Orca decision, please read this article that I co-authored with my colleague, Bill Klain.