Non-Compete Agreements: Does it Matter Whether the Employer or the Employee Terminates the Relationship?

Often this is not a large concern, but may be applicable in some situations. The first question to ask is when was this non-compete agreement signed?

In Arkansas, the watershed date is July 22, 2015, which is when a landmark non-compete statute came into play.

For non-competes signed after July 21, 2015, the Arkansas non-compete statute is silent on this issue. Absent some later court authority holding otherwise, of which to date there is none, in a purely legal sense this fact does not meaningfully inform the question of whether a non-compete agreement is enforceable. As a more practical observation, this is not the same thing as saying that this fact is irrelevant. In any matter that may ultimately be tried before a jury, one can expect jurors to view an employee differently depending which side of the employment ended the relationship. 

For non-competes signed on or before July 21, 2015, there is some history for Arkansas courts weighing the issue of who terminated the employment relationship. Andres v. Cogbill, 1994 WL 318026, at *4-5 (Ark. Ct. App. June 29, 1994). Given that Arkansas courts have at times examined whether enforcing a non-compete agreement would severely restrict an employee’s ability to earn a living, it is understandable that this factor may influence a court, but there is no firm rule to which we can point to as an absolute. See Quality Liquid Feeds, Inc. v. Plunkett, 199 S.W.3d 700, 707 (Ark. Ct. App. 2004)).

This article is part of the Mitchell Williams Non-Compete Agreement series explaining how non-compete agreements are interpreted and enforced. The series will be published weekly for a total of 7 articles.
View the first article of the series: Increased Litigation on the Backside of the "Great Resignation"
View the second article of the series: What is a Reasonable Duration for a Restriction?
View the third article of the series: What is a Reasonable Geographic Area of Coverage for a Restriction?
View the fourth article of the series: Does it Matter Whether the Employer or the Employee Terminates the Relationship?
View the fifth article of the series: Must an Employer Pay an Employee for a Non-Compete to Be Enforceable?
View the sixth article of the series: Will Arkansas Courts "Blue Pencil" an Unreasonable Non-Compete Agreement? 
View the seventh article of the series: Are They Enforceable in Contracts for Medical Services?