Yes, non-compete agreements are generally enforceable in Arkansas, but only when they meet the standards set out in Act 921 of 2015, codified at Arkansas Code Annotated section 4-75-101. Under that statute, a non-compete is valid only if your employer has a genuine protectable business interest and the restriction is limited in time and scope to no more than is necessary to protect that interest. A critical Arkansas-specific detail: the statute treats a time limit of two years or less as presumptively reasonable, and it expressly says that the absence of a geographic limit does not, by itself, make the agreement unenforceable. Just as important, since 2015 Arkansas courts have had the power to reform (rewrite) an overly broad non-compete rather than throw it out entirely, which means a flawed agreement is more likely to be narrowed and enforced than completely voided.
Arkansas's Current Rule on Non-Competes
Before Act 921, Arkansas courts applied a strict "all or nothing" approach: if a covenant not to compete was too broad in time, geography, or scope, judges typically struck the entire clause and declined to rewrite it. Act 921 of 2015 reversed that approach for agreements entered into on or after the law's effective date. Today, the analysis turns on three questions:
- Does the employer have a protectable business interest? The statute lists examples, including trade secrets, intellectual property, customer lists, goodwill, confidential business information, and specialized training or education the employer provided. A general desire to avoid ordinary competition is not enough.
- Is the restriction reasonable in time? A duration of two years or less is presumed reasonable under the statute. Longer terms are not automatically void, but the employer carries a heavier burden to justify them.
- Is the scope no greater than necessary? The restricted activities and any geographic area must match the legitimate interest being protected. Notably, Arkansas law states that a non-compete is not unenforceable merely because it lacks a specific geographic boundary, so long as the overall restriction is reasonable.
If a court finds the agreement too broad, Act 921 authorizes the judge to modify or "reform" it so the restriction is enforced only to the extent reasonable. This is a meaningful difference from the pre-2015 rule and from states that still refuse to rewrite defective clauses.
Does Arkansas Ban Non-Competes for Low-Wage Workers?
This is where Arkansas differs sharply from a number of other states. Some states (for example, by income threshold) prohibit non-competes for low-wage or hourly workers entirely. Arkansas has not adopted a statutory wage threshold that automatically exempts low-wage employees from non-competes. In theory, the same reasonableness analysis applies whether you earn a modest hourly wage or a six-figure salary.
That said, your pay and role can still matter to the outcome. A court weighing reasonableness will consider whether you actually had access to trade secrets, key customers, or confidential information. A rank-and-file employee with no access to protectable information gives the employer little legitimate interest to defend, which can make a non-compete unenforceable against that worker even without a special low-wage carve-out.
The Federal Picture and Recent Developments
There is no federal statute that broadly bans non-competes. In 2024, the Federal Trade Commission issued a rule that would have prohibited most non-compete agreements nationwide, but a federal court set that rule aside before it took effect. As a result, the FTC's non-compete ban is not in force, and Arkansas's state-law standard under Act 921 continues to govern. You should treat any claim that "non-competes are now illegal everywhere" with caution and verify the current status before relying on it.
By contrast, federal wage law gives a useful point of comparison for how Arkansas can be more protective than the federal floor on other issues. The federal Fair Labor Standards Act (FLSA) sets a minimum wage of $7.25 per hour and requires overtime at one and one-half times your regular rate after 40 hours in a workweek. Arkansas's minimum wage is higher: $11.00 per hour as of 2026. Because state wage figures can change, confirm the current rate with the Arkansas Department of Labor and Licensing before depending on it. Non-compete enforceability, however, is governed by contract and competition law, not the wage statutes, so meeting minimum-wage rules does not by itself make a non-compete valid or invalid.