In Ohio, a non-compete agreement is a written agreement between an employer and employee that prohibits the former from engaging in competitive activities following their termination.
A non-compete agreement must be “fair” in order to safeguard the employee, according to case law, even if there are no Ohio Revised Code sections that address non-competes.
A Non-Compete Agreement: What Is It?
In Ohio, a non-compete agreement is essentially a contract between an employer and employee that prohibits the former from competing with the latter following termination. The terms speak about working for rival companies for a duration of up to a year.
In Ohio, an employer can avoid problems by implementing a non-compete policy. An example of this is a former employee contacting past clients to prevent the exchange of urgent, private information.
A non-compete clause prevents you from going after a profession in your current field that makes sense. Naturally, this may lead to a significant narrowing of your professional choices. You do not have to accept anything from your company in return for signing a non-compete agreement. All they have to do is hire; there is no time limit.
Case Law in Ohio
Non-compete agreements’ enforceability in Ohio is based on a wide range of variables. Back in 1975, the Ohio Supreme Court considered Raimonde v. Van Vlerah, which established standards for judging whether a noncompete was lawful. The criteria outlined in that instance are still relevant. Van Vlerah v. Raimonde, 42 Oh. St.2d 21 (1975)
Is Ohio Enforcing Non-Compete?
In Ohio, non-compete clauses are upholdable. Nonetheless, legal regulations stipulate that a non-compete clause must be “fair” in order to safeguard the employee.
In Ohio, a fair non-compete agreement needs to:
- Be no more than what is necessary to safeguard a legitimate interest of the employer;
- Not subject you to unnecessary suffering;
- Not do harm to the general public.
The following are some of the most typical clauses in a legitimate non-compete agreement:
Confidentiality: This maintains the non-compete agreement’s terms private. This clause has to contain exclusions for things like consulting an accountant or attorney.
Non-Disparagement: This clause forbids you and your ex-employee from disparaging one another in public. This prevents you from attempting to harm your former employees’ reputation in an effort to steal business from them. Additionally, it safeguards your reputation in the job market.
Possibility to Examine and Think About the Agreement: Typically, the company will put in a sentence stating that you have read and comprehended the agreement. Because this will stand up in court, make sure you have read and comprehended the contract. It will not be possible for you to claim that you missed this in the contract.
Severability: This is crucial because it means that the remaining provisions will remain enforceable even if a court rules that a certain term is unconstitutional. Instead of defending your rights, this upholds the employer’s.
Applicability to Successors and Assigns: This implies that your non-compete remains in effect in the event that the business you work for is acquired or combined.
What Takes Place If I Violate a Non-Compete Agreement?
The Ohio Supreme Court upholds non-compete clauses, and an employee’s continuous employment with a company serves as adequate proof of a promise not to compete.
As long as it is appropriate, the employee is in charge of upholding their own non-compete agreement. If the agreement is broken, defenses may be raised, and the court may modify it to make reasonable changes.
Non-compete clauses and independent contractors:
By forcing independent contractors to sign non-compete agreements, which in Ohio can convert their status to that of an employee, employers are placing themselves at risk. This may have an impact on eligibility for minimum wage standards, unemployment insurance, and workers’ compensation benefits.
Since contractors need to sign many contracts in the same business, non-compete agreements are more difficult to enforce than those with employees. Businesses might use non-compete clauses to their advantage, giving them an unfair competitive edge. Non-compete clauses are generally not very advantageous to clients or contractors.
Ohio’s Non-Compete Lawsuit:
Ohio courts consider whether the contract itself is reasonable when deciding whether to uphold a contested noncompete. Among the standards applied to this assessment are:
- The amount of time that keeps you from participating
- The location where it is against the law for you to work
- How many trade secrets or private information do you have access to?
- In the event that the non-compete seeks to end unfair competition or competition in general,
- If the advantages to the employer surpass the difficulties you face, then
- If the non-compete clause would make it difficult for you to obtain appropriate funding
The duration of the contract and the territory it covers are two common areas that will work in your favor for an Ohio non-compete. In Ohio, a court will typically find a non-compete agreement inappropriate if it is for more than two years or if the scope of the agreement is too wide.
Additionally, a non-compete agreement in Ohio will restrict your job alternatives if you operate in a specialty market or industry, which will put you in an unfairly difficult situation.
FAQs:
What might occur if I break the noncompete agreement?
In order to prevent you from working in your new role or communicating with clients during the agreed upon time frame, your previous employer may file a lawsuit. In addition, if you break the agreement, the lawsuit may try to get money damages from you.
Noncompete conflicts can often be resolved through a negotiated solution that is acceptable to the employee, the new employer, and the previous employer. Your previous employer may consider a solution to protect its commercial interests and prevent litigation, depending on the specifics of the situation.
What nullifies a noncompete clause?
A contract that prohibits someone from engaging in a lawful profession, trade, or business of any type is void according to California Business and Professions Code Section 16600, with certain carefully crafted exceptions.
Can I work for a competitor if I have a non-compete?
A noncompete agreement commits an individual to refrain from direct competition with their previous company for a reasonable period and within a reasonable geographic radius.
