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Restrictive covenants, trade secrets and other employment agreements — Arizona

Under Arizona law, the employment relationship establishes a contract, whether it is written or oral, express or implied. Employment agreements can range from a simple statement that the employer will pay a certain amount for labor to formal, lengthy written employment contracts.

Employment agreements establish and define the legal relationship between an employer and an employee. A written employment agreement enables a company to identify its obligations to the employee and to limit its liability or damages for conflicts that may arise, although a contract may also enable an employee to obtain protection against the termination of employment without notice or cause during the term of the employment agreement.

Drafting an employment agreement involves the same considerations as drafting any contract. Individualized thought is necessary to assemble a completed employment agreement that considers the unique aspects of that particular employer’s and employee’s situations. Written employment agreements are the exception, rather than the rule. Written employment agreements are most commonly used for higher ranking executives who have more leverage to obtain assurances of job security because their talents are in demand by employers. Written employment agreements may also be used with sales employees who receive commissions or others with...

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