Legal Question in Civil Litigation in Arizona

I am an avid police scanner listener and also own my own web design company. About 2 years ago, I joined a scanner listening club. Us members listen to our scanners, and when a newsworthy incident is heard, we send the details via a text service that then goes to paid subscribers such as news organisations. We are not paid. It is all volunteer. We buy our own equipment, and listen on our own time. The only person that is paid, is the club owner. He is paid by the subscribers who receive the text alerts. When I joined the club, I signed a non compete agreement that states I would not start a competing club, join a competing club, or derail the operations. The agreement is enforced as long as I am a club member and for 6 years AFTER I am a club member for a radius of 500 miles.

A friend of mine (not a club member) has developed a system that greatly simplifies the text service, and has ideas that could reach many more people and make him big $. He wants my company to build his website. A website that in essence would compete with the club I am a part of. He also wants my help implementing other ideas. This is a great money making opportunity for me.

The club owner has no desire to work with my friend or implement any of our ideas. What would the ramifications be (if any) if I were to assist with the new project? Keeping in mind I do NOT get paid with the club one cent, and I still have my own business to run. Is it fair for me to have to turn down a 5 figure project because of a darn non compete agreement I signed with a club that I volunteer for?

Asked on 4/10/12, 7:04 am

1 Answer from Attorneys

Joyce Johnson-Stovall Johnson Stovall and Associates PLLC

Non compete agreements are disfavored by Arizona and Federal courts. In order to assist you in resolving this problem, it would be necessary for us to review the language of the non compete agreement to see if it is a valid and enforceable contract. Often non compete agreements are written to scare people to keep them from competing. In order to determine whether your agreement is worth the paper it is written on, it would be necessary for us to review the agreement. If you would like us to review the agreement to assist you in determining whether the length of time and area which is restricted creates an enforceable contract, please call Stephanie Coulter of this office at 602 462 1004 and she will arrange to have the agreement reviewed and set up a telephone conference with you.

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Answered on 4/26/12, 8:11 pm

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