Allowed if reasonable

Non-compete law in Arkansas

Arkansas enforces employee noncompetes that are ancillary to employment, protect an employer's protectable business interest (trade secrets, customer lists, goodwill, training, other confidential information) and are no greater in time and scope than necessary; a two-year post-termination restriction is presumptively reasonable, continued employment is enough consideration, and courts must reform overbroad covenants. Act 232 of 2025 (SB 139, signed 2025-03-04) made a noncompete void if it restricts a physician (Medical Practices Act licensee or osteopath) from practicing within the physician's scope of practice. The statute does not apply to other Title 17, Subtitle 3 licensed professionals.

Last verified · confidence medium. Clauseworthy is not a law firm and does not give legal advice.

Employee non-competes
Not banned; conditions apply
Pay floor
None in the statute
Duration
No cap. A two-year post-termination restriction is presumptively reasonable as to time unless the facts clearly show two years is unreasonable compared to the employer's protectable interest (subsec. (d) as enacted by Act 921 of 2015).
Notice
None in the statute.
Consideration
An employee's continued employment is sufficient consideration (subsec. (g)). Must be ancillary to an employment relationship or part of an otherwise enforceable employment agreement (subsec. (a)).

Exceptions and special rules

  • Sale of a business: the statute allows a non-compete given by a seller.
  • The employment-covenant rules do not apply to covenants ancillary to other contractual relationships such as sale of a business or franchise agreements; existing common-law standards stay in effect for those (subsec. (h))
  • Employee non-solicit/no-hire, confidentiality and nondisclosure agreements and employment terms that do not concern competition are outside the statute; common law governs them (subsec. (i))
  • Does not impair rights under the Arkansas Trade Secrets Act (subsec. (j)(1))
  • Statute does not apply to a person holding a professional license under Ark. Code Title 17, Subtitle 3 (subsec. (j)(2)), except that physicians are covered by the void rule in subsec. (k) (Act 232 of 2025)
  • Physician (Arkansas Medical Practices Act licensee or osteopath). A covenant not to compete that restricts the right of a physician to practice within the physician's scope of practice is void (new subsec. (k), Act 232 of 2025). 'Physician' means a person authorized or licensed to practice medicine under the Arkansas Medical Practices Act (Ark. Code § 17-95-201 et seq., § 17-95-301 et seq., § 17-95-401 et seq.) or authorized to practice osteopathy (§ 17-91-101 et seq.). The Act's title calls it a clarification of unenforceability for certain licensed medical professionals. (Act 232 of 2025 (SB 139) section 3 adding Ark. Code § 4-75-101(k))
  • Other persons holding a professional license under Title 17, Subtitle 3. The statutory enforceability rules do not apply to them (subsec. (j)(2) as amended by Act 232 'except as provided under subsection (k)'); their covenants are left to common law. Which professions Subtitle 3 covers was not read. (Ark. Code § 4-75-101(j)(2) (Act 921 of 2015 s. 1; Act 232 of 2025 s. 2))

Non-solicitation clauses

Agreements not to solicit, recruit or hire employees are outside the statute and remain under existing common-law standards (subsec. (i)(1)(A), (i)(2)). Customer non-solicitation is not mentioned; whether it counts as a covenant not to compete is not answered by the text.

Contracts naming another state's law

None in the statute.

Remedies

Court may award damages and/or appropriate injunctive relief; the immediate harm from a breach is considered irreparable for a preliminary injunction (subsec. (e)). If a restriction is unreasonable, the court shall reform it and enforce as reformed (subsec. (f)).

Which agreements it covers

Base statute: Act 921 of 2015 (SB 998), approved 2015-04-01; the engrossed text has no effective-date or emergency clause, so it presumably took effect under the general 90-days-after-adjournment rule (exact date not verified, so the field above is null). Physician rule: Act 232 of 2025, approved 2025-03-04, no emergency clause in the text; secondaries give effective dates between 2025-07-11 and 2025-08-05 (not verified). The Act calls itself a clarification, so whether it reaches earlier agreements is unresolved.

Recent changes

  • 2025-03-04. Act 232 (SB 139): physician noncompetes void; subsection (j) made subject to new (k). Status page shows no amendments in either chamber; effective date follows the general 90-day-after-adjournment rule (secondaries: Aug. 5, 2025; not verified). Source
  • 2015-04-01. Act 921 of 2015 (SB 998) approved: created the statutory enforceability test (originally § 4-70-207; Act 232 of 2025 cites the same text as Ark. Code § 4-75-101). Source

Primary sources

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