Many employers ask employees to sign non-compete agreements to prevent them from working for competing companies during or after their employment. These types of contracts can have a significant impact on a worker’s ability to move forward in their career — and affect their earning capacity. If you’ve been asked to sign such a document, you might be wondering, “are non-compete agreements enforceable?” Generally, non-compete agreements are typically enforceable in Ohio as long as they are reasonable.
A non-compete agreement is a type of employment contract — or a clause within a contract — that prohibits an employee from starting a competing business or working for a competitor. These agreements also prohibit an employee from revealing an employer’s proprietary information while they are working for a company, and for a certain period of time after their departure. Such contracts are common in a variety of industries, including finance, corporate management, manufacturing, technology, media, and the creative fields.
Non-compete agreements usually specify a certain length of time and a geographic scope in connection with barring an employee from employment with a competing business. Not to be confused with non-disclosure agreements (NDAs), which are solely used to prevent an employee from revealing a company’s confidential information, employers specifically use non-compete agreements to restrict competition.
Non-compete agreements typically favor employers — they may block an employee from freely changing jobs and seeking other employment. They might also hinder a worker from obtaining a higher wage or attaining better working conditions. But as long as these contracts do not impose unreasonable limitations on employees, non-compete agreements are generally enforceable under Ohio law.
Non-compete agreements in Ohio are generally enforceable if the following criteria are met:
While every non-compete agreement is different, it’s vital for an employee to carefully consider the terms before entering into one. It’s best to have an employment attorney review the document to determine whether the non-compete agreement is enforceable — and fair. Notably, even if a court were to find a portion of a non-compete agreement unreasonable, it doesn’t mean that the entire document would be disregarded. In these cases, a judge might simply strike the unreasonable clause and enforce the rest of the agreement.
Ohio law does not prevent employers from requiring employees to sign non-compete agreements as a condition of employment. If an employee violates the terms of a non-compete agreement, the employer may be entitled to take legal action to enforce the contract. For instance, the employer might request a preliminary injunction, a temporary restraining order, or monetary damages. However, in order to prevail, the employer must be able to prove that the terms of the agreement are reasonable.
Courts will only enforce a non-compete agreement to the extent it is necessary to safeguard an employer’s legitimate business interests. Significantly, courts in Ohio evaluate a number of factors when determining whether a non-compete agreement is reasonable. It will look at the length of time the agreement curtails the employee from working for a competitor and the geographical area where the employee may not work. A judge will also consider whether the employee knows about any of the employer’s confidential information or trade secrets, as well as whether the agreement seeks to restrain unfair competition — or merely ordinary competition.
Additionally, a court will weigh the benefit of enforcing the clause with the hardship on the employee and consider whether enforcing the agreement would leave the employee without a means to financially support themselves, among any other relevant factors. In most cases, a non-compete agreement will last between six months and two years. If a non-compete agreement lasts longer than two years, an Ohio court might deem it unreasonable.
If you have concerns regarding whether your non-compete agreement is enforceable, it’s essential to have a skillful employment law attorney by your side. Located in Westlake and providing dedicated counsel to clients throughout Ohio, employment law attorney Chris Lalak is committed to assisting employees with reviewing, negotiating, and disputing non-compete agreements. Applying his extensive experience and insight, he works to achieve the best possible results in every case. Contact Lalak LLC today to schedule a free, confidential, no-obligation consultation and learn how we can help.