Legal Question in Business Law in Arizona

I received a Non-Compete form from my hose cleaning service... In it, they claim that if I try to hire one of their employees for 'private work', that I will be fined $2,500, although they are calling it a 'Finder's Fee."

I am fairly confident that this is in no possible way enforceable as I do not work for them, they actually work for me. But I would like to know if they actually tried enforcing their fee, would they actually be violating any laws? Seems to me, they would be violating my First Amendment rights. Ami correct?

Asked on 1/21/20, 8:42 am

1 Answer from Attorneys

Frank Natoli Natoli-Legal, LLC

It's a non-circumvention provision and it is of course enforceable. If you disagree with it, don't sign it. But this is a private contract and has nothing to do with the Bill of Rights. They are not the government and this does not infringe on your freedom of expression.

The $2500 "finder's fee" is silly. A court will consider this a liquidated damage clause and unless they can demonstrate why it was needed meaning that there was just no way to establish real damages at the time of breach, then a court will likely throw it out as punitive and replace it with something more reasonable.

The provision is quite common, the "finder's fee" liquidated damage not so much.

I hope that helped.

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Answered on 1/21/20, 8:48 am

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