
Many employers use non-compete agreements to prevent employees from working for a competitor after they’ve parted ways with the company. Critically, these agreements primarily benefit employers while not always adequately providing for the rights of workers. While non-compete agreements are enforceable in Ohio and can place significant limitations on an employee’s livelihood, you may want to speak to an experienced employment law attorney to review it before you sign one.
A non-compete agreement is a contract between an employer and employee in which the employee agrees not to work for a competitor or start a competing business after their employment ends. While these agreements are meant to protect an employer’s interests and trade secrets, they can seriously limit a worker’s ability to find a new job and earn a living. If a former employee violates a non-compete upon separation, the employer may file a lawsuit for breach of contract and request that the court enforce the agreement.
If you’ve been asked to sign one upon obtaining new employment, you might be wondering, “are non-compete agreements enforceable in Ohio?” Although the Federal Trade Commission (FTC) attempted to ban most non-competes nationwide in April 2024, this rule has been subject to ongoing litigation. Therefore, this ban is not enforceable at this time. While many jurisdictions have banned or restricted non-competes at the state level, there are currently no legal restrictions on non-compete agreements in Ohio. These agreements are usually enforceable as long as they are “reasonable.”
Every non-compete agreement is unique. A court would evaluate the following factors in determining whether a specific non-compete agreement is enforceable:
Typically, courts will only enforce non-compete agreements to the extent necessary to protect the “legitimate business interests” of the employer. In addition, a non-compete must not harm the public. For instance, if a non-compete agreement restricts a doctor from practicing for a certain amount of time in an area where there are few doctors, it may be considered injurious to the public and deemed unenforceable.
While you are not obligated to sign a reasonable non-compete agreement, an employer does not have to hire you if you refuse to sign one. Importantly, if you are presented with a non-compete agreement by your employer or prospective employer, you may want to consider reviewing it with an experienced employment law attorney. An attorney can best advise you regarding whether it is in your best interests to sign the agreement and can negotiate better terms on your behalf if necessary.
One way a non-compete agreement can be negotiated is with a counterproposal. For example, a non-solicitation agreement is typically less restrictive and can offer a viable compromise to a non-compete in appropriate situations. Unlike non-competes (which generally restrict where an employee can work), non-solicitation agreements are much narrower — they only restrict former employees from soliciting employees or clients. An employee may also be able to negotiate phased restrictions that become less stringent over the course of time, or compensation in exchange for signing the non-compete in the form of a severance package or a sign-on bonus.
If you would like to learn more about whether your non-compete agreement is enforceable, it’s best to consult with a knowledgeable employment law attorney. Located in Westlake and offering skillful representation to clients throughout Ohio, Lalak LLC is committed to advocating for the rights of employees. Contact Lalak LLC today to schedule a free, confidential, no-obligation consultation and learn how we can assist you with your employment matter.
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