Non-Compete Overbroad, Business Tort Claims Preempted by Arizona Trade Secrets Act, Federal Court Rules

An employer’s non-competition agreement with its employees was overbroad, unenforceable on its facts and could not be saved by the “blue pencil” rule, Judge Neil V. Wake of the U.S. District Court for the District of Arizona has ruled in an action for alleged violations of restrictive covenants and business torts. Unisource Worldwide, Inc. v. Swope, No. No. CV-12-02036-PHX-NVW, 2013 WL 4029170 (D. Ariz. Aug. 8, 2013). Noting that “Arizona law does not look kindly upon restrictive covenants,” the court, however, permitted the employer’s breach of customer and employee non-solicitation claims to proceed because additional facts were required to determine whether they were reasonable.