Valley Medical Specialists v. Farber
In Valley Medical Specialists v. Farber, 194 Ariz. 363, 982 P.2d 1277 (1999), the court addressed the enforceability of a non-competition clause in the context of medical specialists.
The clause at issue prohibited the departing physician from practicing medicine within a five-mile radius of any of three clinic locations for a period of three years. Farber, 194 Ariz. at 371, P 29, 982 P.2d at 1285.
The court of appeals had relied on the agreement's "severance clause" in concluding that it could modify the terms of the contract and enforce a reasonable restriction on competition. Id. at 366, P 6, 982 P.2d at 1280.
The supreme court held that the non-competition provision was unenforceable because both its geographic scope and its duration were unreasonable. Id. at 371, P 29, 982 P.2d at 1285.
The court then held that the court of appeals erred by rewriting the restrictive covenant "in an attempt to make it enforceable." Id. at 372, P 30, 982 P.2d at 1286.
The court explained that, while Arizona courts may "blue pencil" a restrictive covenant by eliminating grammatically severable, unreasonable terms, the court cannot add provisions or rewrite them. Id. at P 31.