Employee Restrictive Covenant Agreement

“Competitive Business” means the business activities described in Cover Terms under Competitive Business.

“Confidential Information” means non-public information relating to Employer's business, including trade secrets, customer lists, pricing, business processes, technical data, and strategic plans, but excluding information that becomes public through no fault of Employee.

“Covered Customers” means customers, vendors, referral sources, and business partners with whom Employee had material contact or for whom Employee had responsibility during the 12 months before termination of employment.

“Covered Employees” means employees with whom Employee worked or whom Employee managed during the 12 months before termination of employment.

“Passive Public Holdings” means ownership of securities of a publicly traded company representing less than five percent of any class of such company's securities, and interests in diversified mutual funds, index funds, and exchange-traded funds that may hold securities of a Competitive Business.

“Protected Interests” means the legitimate business interests an Arizona covenant may protect under the Valley Medical Specialists v. Farber reasonableness rule, namely Employer's Confidential Information, Employer's trade secrets as defined by the Arizona Uniform Trade Secrets Act (A.R.S. § 44-401), and Employer's goodwill in its customer, vendor, referral-source, and business-partner relationships, but not Employer's interest in avoiding ordinary competition.

“Restricted Period” means the duration specified in Cover Terms for each covenant, beginning on the date Employee's employment with Employer ends for any reason.

“Restricted Territory” means the geographic area described in Cover Terms under Restricted Territory.

“Solicit” means to directly or indirectly contact, approach, induce, encourage, or provide Confidential Information to any person or entity for the purpose of diverting business away from Employer, but does not include responding to general advertisements or unsolicited inquiries not initiated by Employee.

“Trade Secrets” has the meaning given in the Arizona Uniform Trade Secrets Act, A.R.S. § 44-401(4).

Employer and Employee acknowledge that each restrictive covenant in this agreement is intended to protect one or more of Employer's Protected Interests and to impose no restraint greater than is necessary for that protection. Arizona has no general non-compete statute; enforceability is governed by the common-law reasonableness rule of Valley Medical Specialists v. Farber, 194 Ariz. 363, 982 P.2d 1277 (1999), under which a restriction is unreasonable and will not be enforced if the restraint is greater than necessary to protect the employer's legitimate interest, or if that interest is outweighed by the hardship to the employee and the likely injury to the public. The threshold of every covenant is the interest inquiry: a restrictive covenant — whether a covenant not to compete or an anti-piracy agreement — is enforceable only so long as it is no broader than necessary to protect the employer's legitimate business interest, and where the employer has no protectable interest in the relationship restrained the covenant is not enforced (Hilb, Rogal & Hamilton Co. of Arizona v. McKinney, 190 Ariz. 213, 946 P.2d 464 (Ct. App. 1997)). The parties acknowledge that each covenant is meant to guard Employer's Confidential Information, trade secrets, and customer goodwill and not to eliminate ordinary competition, and that Employer would not provide Employee with access to these Protected Interests absent the protections in this agreement. Each covenant is intended to be reasonable in time, territory, and scope, to impose no undue hardship on Employee, and to cause no injury to the public.

The parties acknowledge that A.R.S. § 23-494 makes it unlawful, as a condition of employment, for a broadcast employer — a person that provides broadcasting services over a television or radio station or network — to require a current or prospective employee to agree to a noncompete clause, defined as a clause that prohibits the employee from working in a specified geographic area for a specified period of time after leaving the broadcast employer (A.R.S. § 23-494(B)(2)). Employer represents that it is not a broadcast employer within the meaning of A.R.S. § 23-494, or that Employee is not a current or prospective employee of a broadcast operation; and if Employer is a broadcast employer, the parties intend that no non-competition covenant in this agreement applies to Employee, and any such covenant is deemed omitted rather than enforced or reformed. This screening resolves the one categorical statutory non-compete ban in Arizona before any reasonableness analysis of the remaining covenants begins.

The parties acknowledge that this agreement is supported by adequate consideration. If Employee is an existing at-will employee, the parties agree that, in exchange for Employee's assent to the covenants in this agreement, Employer continues an at-will employment relationship that it could otherwise legally have terminated, which is itself sufficient consideration for the covenants under Mattison v. Johnston, 152 Ariz. 109, 730 P.2d 286 (Ct. App. 1986), and Compass Bank v. Hartley, 430 F. Supp. 2d 989 (D. Ariz. 2006) (applying Arizona law); no separate payment, raise, or promotion is required. If this agreement is signed at the outset of employment, the offer and commencement of employment is the consideration. Employee acknowledges having had the opportunity to consult with independent legal counsel before signing this agreement. Employee acknowledges that the restrictions in this agreement are reasonable and necessary to protect Employer's Protected Interests, and understands that adequate consideration establishes only that the covenants are supported, not that they are reasonable — each covenant must independently satisfy the Farber reasonableness test on time, territory, and scope. This agreement is effective as of the Effective Date listed in Cover Terms.

Employee must treat all Confidential Information as strictly confidential. Employee must not use or disclose Confidential Information except as required to perform authorized job duties or with Employer's prior written consent. Employee's obligations regarding trade secrets continue in perpetuity, for as long as the information remains a trade secret. Employee's obligations regarding other Confidential Information continue for the period specified in Cover Terms. Trade secrets are protected under Arizona law, including the Arizona Uniform Trade Secrets Act, A.R.S. §§ 44-401 to 44-407, which defines a trade secret by its independent economic value from not being generally known and by efforts that are reasonable under the circumstances to maintain its secrecy (A.R.S. § 44-401(4)). The parties intend this confidentiality obligation to be scoped to genuine Confidential Information and trade secrets with the durations stated in Cover Terms, and not to operate as a practical bar on competition: an unlimited confidentiality covenant reaching non-secret information is unenforceable as the equivalent of a geographically unrestricted non-competition agreement (Orca Communications Unlimited, LLC v. Noder, 233 Ariz. 411 (Ct. App. 2013)). This confidentiality obligation is intended to operate alongside, and independent of, any restrictive covenant, and does not restrict Employee's use of the general knowledge, skill, and experience Employee acquired during employment.

Nothing in this agreement prohibits Employee from: (a) reporting possible violations of law to any government agency, including the Securities and Exchange Commission, the Equal Employment Opportunity Commission, the Occupational Safety and Health Administration, or any other federal, state, or local agency; (b) making disclosures protected under whistleblower provisions of any law; (c) discussing wages, hours, or other terms and conditions of employment as protected by applicable law, including Section 7 of the National Labor Relations Act (29 U.S.C. § 157); (d) testifying truthfully in legal proceedings; or (e) filing a sealed complaint in court using Confidential Information without liability. Pursuant to the Defend Trade Secrets Act (18 U.S.C. § 1833(b)), Employee may not be held criminally or civilly liable for disclosing a trade secret in confidence to a government official or attorney solely for the purpose of reporting or investigating a suspected violation of law, or in a sealed court filing.

Upon termination of employment, Employee must promptly return to Employer all documents, devices, files, credentials, and other materials containing or relating to Confidential Information. Where permitted, Employee must permanently delete electronic copies of Confidential Information from personal devices and accounts. Employee must certify compliance with this section in writing upon Employer's request. The parties intend that these return, deletion, and certification mechanics serve as part of Employer's efforts reasonable under the circumstances to maintain the secrecy of its trade secrets, as contemplated by A.R.S. § 44-401(4). The parties note that an action for misappropriation under the Arizona Uniform Trade Secrets Act must be brought within three years after the misappropriation is discovered or by the exercise of reasonable diligence should have been discovered (A.R.S. § 44-406), so the certification should be dated and retained.

During the Restricted Period, Employee must not Solicit, recruit, hire, or attempt to hire any Covered Employee. This restriction does not prohibit Employee from providing a professional reference upon request or from hiring a person who responds to a general advertisement not directed specifically at Employer's employees. Although this is the lightest restraint in this agreement, Arizona runs anti-piracy covenants through the same no-broader-than-necessary test as non-competes (Hilb, Rogal & Hamilton Co. of Arizona v. McKinney), so this covenant reaches only Covered Employees during the Restricted Period, no broader than necessary to protect Employer's workforce stability and goodwill.

During the Restricted Period, Employee must not Solicit the business of any Covered Customer. Arizona analyzes this customer non-solicitation covenant under the Farber reasonableness rule and enforces it only as far as the employer's protectable interest in the specific customer relationships reaches; where the employer has no protectable interest in the account at issue, the covenant is not enforced (Hilb, Rogal & Hamilton Co. of Arizona v. McKinney, 190 Ariz. 213, 946 P.2d 464 (Ct. App. 1997)). This covenant therefore reaches only Covered Customers with whom Employee had material contact and is no broader than necessary to protect Employer's goodwill in its customer relationships. Together with the confidentiality and trade-secret protections in this agreement, it is often a stronger and more readily enforceable protection than a broad non-compete.

During the Restricted Period, Employee must not accept, service, or do business with any Covered Customer, regardless of whether Employee or the Covered Customer first initiated contact. Because Arizona classifies covenants by their functional effect rather than their label (Orca Communications Unlimited, LLC v. Noder), a non-dealing restraint that bars serving customers who approach first sits closer to a non-compete than to a non-solicit and should expect the full Farber reasonableness analysis. It is therefore sized tightly to the goodwill it protects and reaches only Covered Customers with whom Employee had material contact.

During the Restricted Period, Employee must not engage in, be employed by, consult for, or have an active ownership interest in any Competitive Business within the Restricted Territory. This covenant applies only if Employer is not a broadcast employer subject to the A.R.S. § 23-494 ban addressed in the Broadcast-Employer Screening section. This covenant exists to protect Employer's Protected Interests — its Confidential Information, trade secrets, and customer goodwill — and not to restrain ordinary competition, which Arizona disfavors (Amex Distributing Co. v. Mascari, 150 Ariz. 510, 724 P.2d 596 (Ct. App. 1986)). Consistent with the Valley Medical Specialists v. Farber reasonableness rule, the parties intend this covenant to be no greater than necessary to protect Employer, and not to impose a hardship on Employee or an injury to the public that outweighs Employer's interest, with its duration, territory, and activity scope sized to Employee's actual role and Employer's actual market. If Employer has identified specific competitors in Cover Terms under Specified Competitors, the parties intend this covenant to be understood and, if necessary, enforced as limited to those named competitors, because a restraint bound to named competitors is strong evidence that it is no greater than necessary. Passive Public Holdings are permitted.

During the Restricted Period, Employee must not acquire or hold any active ownership interest in, serve as a director, officer, manager, or advisor to, or have material economic participation in any Competitive Business. This restriction primarily targets active or material ownership in private competitors. Because this covenant restrains active roles at and material participation in a Competitive Business, it is a post-employment restraint analyzed under the Farber reasonableness rule and is drawn no broader than necessary to protect Employer's Protected Interests. Passive Public Holdings are permitted.

During the Restricted Period specified in Cover Terms for Non-Disparagement, Employee must not make statements that are intended to or reasonably likely to disparage Employer, its officers, directors, employees, products, or services. This section does not restrict Employee from making truthful statements in legal proceedings, providing truthful testimony, making disclosures to government agencies, or exercising rights protected by law, including rights protected under Section 7 of the National Labor Relations Act.

If Employee is a physician, any covenant in this agreement restraining Employee from the practice of medicine is drafted against Arizona's heightened public-interest scrutiny for physician covenants and not as an ordinary commercial restraint. Physician covenants are not categorically void, but in light of the great public policy interest involved in covenants not to compete between physicians, each such agreement is strictly construed for reasonableness, and where the public policy concern in patients' ability to choose their doctor outweighs the employer's protectable interest the covenant is not enforced (Valley Medical Specialists v. Farber, 194 Ariz. 363, 982 P.2d 1277 (1999)). A reasonable physician covenant can still survive; Arizona rejects the argument that all physician non-competes are unenforceable as against public policy (Phoenix Orthopaedic Surgeons, Ltd. v. Peairs, 164 Ariz. 54, 790 P.2d 752 (Ct. App. 1989)). Accordingly, any physician covenant in this agreement is intended to use a narrow radius and a short term, to preserve patient access and continuity of care, and to be enforced only to the extent it survives that strict construction under the Farber reasonableness rule. There is no enacted Arizona statute banning health-care non-competes, and this agreement does not assume any pending legislation.

Employee represents that performing duties for Employer and complying with this agreement does not conflict with any prior agreement, court order, or legal obligation binding on Employee. Employee must promptly disclose to Employer any potential conflict that arises during employment.

Employer may disclose the existence and terms of this agreement to any prospective employer or business associate of Employee if Employer has a reasonable belief that Employee may breach this agreement. Employee consents to this disclosure. Employer acknowledges that Arizona disfavors these restraints, that a notice built on a covenant that later fails the Farber reasonableness analysis may expose Employer to a claim, and that it should condition any such notice on a restraint it is prepared to defend as no broader than necessary to protect its Protected Interests.

If Employee breaches any restrictive covenant in this agreement, the parties intend that the Restricted Period for that covenant be extended by one day for each day of the breach, so that the full duration of the restriction runs from the date the breach ends. The parties acknowledge that no Arizona appellate decision has decided whether a non-compete period tolls while the employee is in breach or while enforcement litigation is pending, and that any such extension is part of the covenant's total duration, which is measured for reasonableness under the Valley Medical Specialists v. Farber rule. Because Arizona courts strike rather than shorten an unreasonable term, the parties do not intend any extension to push the effective period past what is reasonable, and any extension that would do so is not intended to apply. The parties do not intend an open-ended or indefinite extension.

Employee acknowledges that a breach of this agreement may cause Employer irreparable harm for which money damages would be inadequate. Employer may seek injunctive or other equitable relief in addition to any other remedies available at law, including relief under the Arizona Uniform Trade Secrets Act, under which actual or threatened misappropriation of a trade secret may be enjoined; that Act displaces conflicting civil remedies for trade-secret misappropriation but preserves contractual remedies whether or not based on misappropriation (A.R.S. § 44-407). The parties acknowledge that no injunction recital can make an unreasonable Arizona covenant enforceable: a restriction greater than necessary to protect Employer's legitimate interest will not be enforced at all (Valley Medical Specialists v. Farber). The parties further acknowledge that A.R.S. § 12-341.01 lets a court award reasonable attorney fees to the successful party in any contested action arising out of a contract, whether or not this agreement says anything about fees; that exposure is discretionary and runs both ways, so an Employer that loses an overreaching enforcement action can be ordered to pay Employee's fees.

If any provision of this agreement is found to be unenforceable, the remaining provisions remain in full force and effect. Each restrictive covenant in this agreement, and each duration, territory, and activity restriction within it, is intended to be a distinct, grammatically severable unit that a court could strike individually without disturbing the others, so that a single defect does not void the entire restraint. The parties adopt this structure because Arizona's blue pencil is strictly trim-only: a court may eliminate grammatically severable, unreasonable terms but cannot add provisions or rewrite the covenant to make it reasonable, and where the unreasonable portion is not severable the whole restraint falls (Varsity Gold, Inc. v. Porzio, 202 Ariz. 355, 45 P.3d 352 (Ct. App. 2002); Bryceland v. Northey, 160 Ariz. 213, 772 P.2d 36 (Ct. App. 1989)).

The parties do not rely on any savings or reformation clause to cure an overbroad covenant, because Arizona's blue pencil is strictly trim-only. A court may eliminate grammatically severable, unreasonable terms, but it cannot add provisions or rewrite a covenant to render it reasonable, and an appellate court has reversed a trial court for doing exactly that (Varsity Gold, Inc. v. Porzio, 202 Ariz. 355, 45 P.3d 352 (Ct. App. 2002)). Accordingly, each restrictive covenant in this agreement is drawn as a distinct, grammatically severable, reasonable restraint sized to the Protected Interests from the start, with duration, geography, and prohibited activity set to the minimum the legitimate business interest actually requires, and is intended to be enforceable as written rather than in reliance on judicial revision.

Each restrictive covenant in this agreement survives the termination of Employee's employment for the Restricted Period specified in Cover Terms. Obligations under the Confidential Information and Trade Secret Protection section survive indefinitely to the extent they relate to trade secrets. All other provisions survive to the extent necessary to enforce rights that arose during employment. The parties intend that per-covenant survival keeps each restraint an independently checkable, grammatically severable unit a court can preserve when it strikes a defective neighbor.

Employee may not assign this agreement or any rights or obligations under it. Employer may assign this agreement to any affiliate, successor, or acquirer of all or substantially all of Employer's business or assets. This agreement is binding on and inures to the benefit of the parties and their respective heirs, successors, and permitted assigns. The parties acknowledge that an assignee inherits the Arizona reasonableness analysis unchanged: whoever enforces a covenant must still show its own legitimate protectable interest behind the restraint, and an assignment moves the covenant without strengthening it.

This agreement is governed by the law listed in Cover Terms. Where Arizona law governs, the enforceability of each restrictive covenant is determined under the common-law reasonableness rule of Valley Medical Specialists v. Farber and its progeny; there is no general Arizona non-compete statute and no statutory safe harbor, so each covenant is drafted to survive the holistic reasonableness analysis rather than to escape it. The parties acknowledge that where Arizona has the most significant relationship to an Arizona-centered employment relationship, a court may apply Arizona law — including its strict no-rewrite rule — regardless of any contrary choice-of-law clause, and that a clause selecting another state's more lenient non-compete regime is likely unenforceable under Restatement (Second) of Conflict of Laws § 187(2)(b) because Arizona does not approve of broad non-compete provisions (Pathway Medical Technologies, Inc. v. Nelson, No. CV11-0857-PHX-DGC (D. Ariz. Sept. 30, 2011)). Disputes will be resolved in the courts of the Governing Law state, subject to non-waivable rights under applicable law; the parties acknowledge that a forum-selection clause binds only its parties and cannot be enforced by a non-signatory merely because it is closely related to a party (Henderson v. Moskowitz (Ariz. Nov. 28, 2025)). The parties intend that the governing-law and venue choices match where Employee actually lives and works.

This agreement constitutes the entire agreement between the parties regarding its subject matter and supersedes all prior agreements, understandings, and negotiations on this subject. This agreement may be amended only in writing signed by both parties. A party's failure to enforce any provision does not waive that party's right to enforce it later. This agreement may be executed in counterparts, including by electronic signature, each of which is an original.