employers; contracts; noncompete clause; prohibition

Plain English Breakdown

The specific effective date is missing from the provided source material, so it cannot be stated in the explanation.

HB2361: Ban on Noncompete Clauses in Employment Contracts

This law makes it illegal for public and private employers to require workers to sign agreements that stop them from working elsewhere after they leave their job.

What This Bill Does

• Makes it unlawful for public or private employers to force employees to agree to noncompete clauses as a condition of employment.
• Applies the rule to both current and prospective (future) workers.
• Adds section 23-207 to Arizona Revised Statutes under Title 23, Chapter 2, Article 1.
• Defines what counts as a noncompete clause in an employment contract.

Who It Names or Affects

• Public employers
• Private employers
• Current employees
• Prospective (future) employees

Terms To Know

Noncompete clause

A part of an employment contract that stops a worker from working in a specific geographic area for a set time after leaving the job.

Public employer

An organization owned or run by the government, such as a city agency or school district.

Limits and Unknowns

• The law only applies to contracts signed on or after its effective date.
• The official text does not list an exact calendar date for when this law takes effect.
• The bill summary does not explain penalties for employers who break the rule.

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.