employers; contracts; noncompete clause; prohibition

Plain English Breakdown

The effective date is not specified in the provided official bill summary, which leaves uncertainty about when the law will take effect.

Ban on Noncompete Clauses for Employees

This law makes it illegal for employers in Arizona to require employees to sign noncompete clauses as a condition of employment.

What This Bill Does

• Adds a new section, 23-207, to the Arizona Revised Statutes that bans public and private employers from requiring current or prospective employees to agree to noncompete clauses.
• Defines 'noncompete clause' in the context of an employment contract as a provision that prohibits an employee from working in a specific geographic area for a certain period after leaving their job.
• Specifies that this new law applies only to contracts signed on or after the effective date.

Who It Names or Affects

• Public and private employers who require employees to sign noncompete clauses
• Current and prospective employees asked to agree to noncompete clauses

Terms To Know

noncompete clause

A part of an employment contract that stops someone from working in a specific geographic area for a certain period after leaving their job.

Limits and Unknowns

• The bill does not specify what happens to existing noncompete clauses before the effective date.
• It is unclear how employers will enforce other types of restrictive agreements that are similar but not exactly noncompete clauses.

Official Summary Text

HB2361 - employers; contracts; noncompete clause; prohibition

Current Bill Text

HB2361 - 572R - I Ver

REFERENCE TITLE:
employers; contracts; noncompete clause; prohibition

State of Arizona

House of Representatives

Fifty-seventh Legislature

Second Regular Session

2026

HB 2361

Introduced by

Representatives
Crews: Connolly, Contreras P, Liguori, Travers, Villegas

AN
ACT

amending title 23, chapter 2, article 1,
arizona revised statutes, by adding section 23-207; relating to
employment.

(TEXT OF BILL BEGINS ON NEXT PAGE)

Be it enacted by the Legislature of the State of Arizona:

Section 1. Title 23, chapter 2, article 1,
Arizona Revised Statutes, is amended by adding section 23-207, to read:

START_STATUTE
23-207.

Public employer; private employer; noncompete clause;
prohibition; definition

A. As a condition of employment, it
is unlawful for a public or private employer to require a current or
prospective employee to agree to a noncompete clause.

B. For the purposes of this section,
"noncompete clause" means a clause in an employment contract with an
employee that prohibits the employee from working in a specific geographic area
for a specific period of time after leaving that employment.
END_STATUTE

Sec. 2.
Applicability

Section 23-207, Arizona Revised
Statutes, as added by this act, applies to contracts entered into on or after
the effective date of this act.