Because Arizona’s “Fundamental Policy” Regarding Non-Compete Clauses Is So Different From That Of The State Of Washington, Arizona Federal Court Refuses To Enforce Clause’s Provision Calling For Applicability Of Washington State Law

Courts around the country are split as to the circumstances under which the parties’ choice of law set forth in a non-compete agreement will be honored. In a recent diversity jurisdiction case ruling, Arizona U.S. District Court Judge David Campbell recently refused to enjoin violations of a non-compete clause which said that the law of Washington State applied. He held that Arizona had a greater interest than Washington in the case before him, and that Arizona’s “fundamental policy” (a) requires courts in that state to be less tolerant than courts in Washington with regard to enforcing broad non-compete clauses, and (b) prohibits Arizona jurists (unlike their Washington counterparts) from using a “blue pencil” to make such clauses reasonable. He concluded that an Arizona court would be unwilling to enforce the parties’ agreement in the circumstances here. Pathway Med. Technologies, Inc. v. Nelson, Case No. CV11-0857 PHX DGC (D.Ariz., Sept. 30, 2011).

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