Arizona Non-Compete Laws (2026): Are Non-Competes Enforceable?

Arizona enforces employee non-competes only if they are reasonable, and its courts read them strictly against the employer. There is no general Arizona non-compete statute; the rule comes from case law, led by the Arizona Supreme Court's decision in Valley Medical Specialists v. Farber, 194 Ariz. 363, 982 P.2d 1277 (1999). The one statutory ban, A.R.S. § 23-494, covers broadcast employees only.

Arizona courts will strike an unreasonable term only if it can be cut out grammatically; they will not rewrite a covenant. Bills to ban employee non-competes were held in committee in both 2025 and 2026. For how other states treat these agreements, see our non-compete laws by state guide.

Information last verified on 2026-10-08. This article has not been reviewed by a licensed lawyer.

Jurisdiction scope: This article covers Arizona's common-law rule on employee covenants not to compete under Valley Medical Specialists v. Farber (1999), the broadcast-employee ban in A.R.S. § 23-494, and recent Arizona bills, with a short note on the federal FTC rule. It does not cover trade-secret claims (see Arizona trade secret laws), severance agreements (see Arizona severance pay laws), or the professional-conduct rules for lawyers.

Are non-competes enforceable in Arizona?

They can be, but the employer carries the burden. In Farber, the Arizona Supreme Court, citing an earlier Court of Appeals decision (Amex Distributing Co. v. Mascari, 1986), noted that restrictive covenants between employers and employees are disfavored and strictly construed against the employer (para. 13), and it treated the doctor's covenant under that stricter employment standard (para. 14). It then set out the test (para. 33):

"The burden is on the party wishing to enforce the covenant to demonstrate that the restraint is no greater than necessary to protect the employer's legitimate interest, and that such interest is not outweighed by the hardship to the employee and the likely injury to the public." Valley Medical Specialists v. Farber, 194 Ariz. 363 (1999), para. 33

That gives three questions a court asks:

The court also explained that reasonableness depends heavily on the facts of each case, while the ultimate question is one of law for the court (paras. 10-11). Our research found no Arizona statute setting a maximum length, territory or salary threshold for ordinary employee non-competes.

What a court does with an overbroad non-compete

Arizona uses a strict form of the blue-pencil rule. In Farber, the court said Arizona courts may "blue pencil" a restrictive covenant by eliminating grammatically severable, unreasonable provisions, and that the lower court's rewrite of the covenant went too far (para. 30). It disapproved the part of an earlier Court of Appeals decision, Peairs, that let courts rewrite a covenant into something significantly different from what the parties created (para. 32).

Put simply, an Arizona court can delete an unreasonable clause if the rest still stands on its own, but it will not draft a narrower restriction to replace one that is too broad. Where the contract itself does not show that a provision can be severed, the court will not create a new agreement for the parties (para. 30).

A clause in the agreement authorizing a court to modify unreasonable terms does not change this. In Varsity Gold, Inc. v. Porzio, 202 Ariz. 355, 45 P.3d 352 (App. 2002), the Arizona Court of Appeals held that a trial court was not authorized to rewrite a covenant "merely because the parties had authorized such revisions," and that any judicial reformation beyond blue-penciling is not allowed.

Signing after you start the job

In Mattison v. Johnston, 152 Ariz. 109, 730 P.2d 286 (App. 1986), the Arizona Court of Appeals considered a covenant a salon employee signed about two years into at-will employment. It held that the implied promise of continued employment, together with employment that actually continued for almost three months until she quit, was enough consideration for the covenant.

The court noted that other courts have said a short period of employment may not be enough where an employer obtains the signature and then fires the employee in bad faith soon after, but that situation was not before it.

Physicians and other health-care workers

Farber was itself a physician case. The Arizona Supreme Court held a doctor's three-year restrictive covenant, which covered several of the medical group's offices, unenforceable. The court found the group's interest was outweighed by the likely injury to patients and the public.

The court said covenants restricting a physician's practice carry strong public policy implications and must be closely scrutinized (para. 16). It stopped short of holding that physician covenants will never be enforced, but cautioned that they will be strictly construed (para. 33). In footnote 1, the court noted it did not decide the doctor's request to declare physician covenants void as a matter of law.

Our research found no Arizona statute banning physician non-competes. A 2024 bill aimed at residency and fellowship hires, HB 2644, was held in committee.

Broadcast employees: the one statutory ban

A.R.S. § 23-494 bars non-competes for television and radio broadcast workers. The current statute reads:

"As a condition of employment, it is unlawful for a broadcast employer to require a current or prospective employee to agree to a noncompete clause." A.R.S. § 23-494

The statute defines a "noncompete clause" as "a clause in an employment contract with a broadcast employer that prohibits an employee from working in a specific geographic area for a specific period of time after leaving employment with the broadcast employer." The text of § 23-494 contains no penalty, private right of action or enforcement provision, and it names no state agency.

Sale of a business versus employment

Courts treat a covenant signed when a business is sold more leniently than one signed by an employee (Farber, para. 13, citing Amex). In Farber, the court found that a covenant among physician partners was more like an employer-employee agreement than a sale of a business (para. 14), so the stricter employment standard applied.

Arizona non-compete bills

Arizona lawmakers have introduced bills to ban employee non-competes, but none has become law. Each status below is the final disposition shown in the legislature's official bill records.

A scan of the titles of all 2025 and 2026 Arizona bills turned up no other employee non-compete bill. A title scan can miss a bill with an unrevealing title.

The FTC rule and Arizona non-competes

The FTC's nationwide non-compete rule never took effect. A federal court in Texas set it aside on August 20, 2024 (Ryan, LLC v. FTC, No. 3:24-CV-00986-E, N.D. Tex.), the FTC voted on September 5, 2025 to dismiss its appeals, and the FTC removed the rule from the Code of Federal Regulations on February 12, 2026. The FTC still acts case by case; on June 22, 2026 it approved a final order requiring a pest-control company to stop enforcing non-competes. More detail: FTC non-compete ban struck down and our non-compete laws by state guide.

Non-competes and trade secrets

A non-compete is a contract term; trade-secret protection is a separate body of law that does not depend on one. See Arizona trade secret laws.

Questions this page does not answer yet

Our research did not verify Arizona rules on the following, so this page states no rule on any of them:

• whether being fired without cause affects enforcement (for the state's at-will rule, see Arizona at-will employment laws);
• whether an Arizona court will honor an out-of-state choice-of-law or forum clause;
• separate rules for customer non-solicitation and confidentiality agreements.

We did not identify a state agency that handles non-compete complaints; outside the broadcast statute, disputes are decided by the courts.

If you have been asked to sign

Because Arizona puts the burden on the employer, weighs hardship to the employee and injury to the public, and will not rewrite an overbroad covenant, whether a particular agreement holds up depends on its length, territory, the interest it protects and how it is worded. A lawyer licensed in Arizona can review a specific agreement against those points.

Related

• Non-compete laws by state
• Arizona trade secret laws
• Arizona severance pay laws
• Arizona at-will employment laws
• FTC non-compete ban struck down

Disclaimer: This article provides general legal information about Arizona non-compete law under Valley Medical Specialists v. Farber (1999) and A.R.S. § 23-494, not legal advice. The information was last verified on 2026-10-08. Arizona non-compete disputes are decided by the courts; for advice about a specific agreement, contact a legal aid office or a lawyer licensed in Arizona.

Last updated: 2026-10-08.

Frequently Asked Questions

Are non-competes enforceable in Arizona?

They can be, if reasonable. Under Valley Medical Specialists v. Farber (1999), the party enforcing the covenant must show it is no greater than necessary to protect a legitimate interest and that the interest outweighs the hardship to the employee and the likely injury to the public.

Will an Arizona court rewrite an overbroad non-compete?

No. Farber (1999) allows a court to strike only grammatically severable, unreasonable provisions and disapproved rewriting a covenant into something significantly different.

Does Arizona ban non-competes?

Not generally. The only statutory ban, A.R.S. § 23-494, covers broadcast employees; HB 2589 (2025) and HB 2361 (2026), which would have banned employee non-competes, were held in committees.

Can Arizona doctors be bound by a non-compete?

Possibly. Farber held a physician's three-year covenant unenforceable and said physician covenants are strictly construed, but it stopped short of holding they will never be enforced.

Is there a salary threshold for Arizona non-competes?

Our research found none in Arizona statutes. Outside broadcasting, enforceability turns on the common-law reasonableness test from Farber (1999).

Can a TV or radio station make me sign a non-compete in Arizona?

A.R.S. § 23-494 makes it unlawful for a broadcast employer to require a current or prospective employee to agree to a noncompete clause as a condition of employment.

Does the FTC non-compete ban apply in Arizona?

No. A federal court set the FTC rule aside on August 20, 2024, and the FTC removed it from the Code of Federal Regulations on February 12, 2026.