Cleveland Noncompetition Agreement Attorneys
Noncompetition agreements are a fairly common type of employment contract in Ohio. A noncompetition agreement is a binding contract between the employer and employee that limits the employee’s ability to work for a competitor for a period of time after leaving the employer, even if the employee is fired without just cause.
Noncompetition agreements can impose serious limits on an employee’s ability to earn a living, and violating these contractual promises can have serious consequences for Ohio employees. If you have a noncompetition contract already, or if your employer attempts to force you to sign one, you should contact an experienced Cleveland employment contract attorney right away to learn how best to protect your rights.
Helping Employees with Non-Compete Agreements
Under Ohio law, noncompetition contracts are enforceable if they are reasonable. Although the question of reasonableness is a very fact-specific one, and depends on the particular circumstances of a given situation, the Ohio Supreme Court has set out a legal test for courts to apply. A noncompetition clause in an employment contract is considered reasonable, and will therefore be enforced, if its restrictions:
- Are no greater than necessary to protect the employer’s legitimate business interests;
- Do not impose undue hardship on the employee; and,
- Are not injurious to the public.
Courts look to a variety of factors when applying this test for evaluation of the reasonableness of noncompetition agreements. Some of these factors include:
- The length of time the contract prohibits the employee from competing;
- The size of the geographic area in which the employee is prohibited from working;
- Whether the employee has knowledge of the employer’s confidential information or trade secrets;
- Whether the noncompete clause is an attempt to eliminate unfair competition or merely ordinary competition in the marketplace;
- Whether the benefit of enforcing the clause is outweighed by the hardship on the employee;
- Whether enforcing the noncompetition agreement would leave the employee with any other means of financial support; and,
- Any other relevant factor.
Two of these factors deserve particular discussion. First is the length of time in a noncompetition agreement. Most noncompetition agreements have a time restriction ranging between six months and two years. Ohio courts tend not to enforce noncompetition clauses lasting more than two years. Second is the geographic scope of the agreement. The larger the geographic area in which the employee is restricted from working, the more likely it is that the agreement is impermissibly broad. Although it will depend on the nature of the employer’s business and the employee’s job duties, absent unique circumstances, Ohio employers are generally not allowed to have a nationwide or worldwide noncompetition clause.
The more unique the employee’s profession, the more likely it will be that the employee can show that enforcement would pose an undue hardship. With that in mind, if an employee can show enforcing the agreement would effectively prohibit the employee from finding a new job, the chances of avoiding, or at least limiting, enforcement will rise significantly. When fighting an unreasonable noncompetition clause, having the assistance of a skilled Cleveland employment contract lawyer can help limit the impact of the agreement on the employee’s ability to earn a living.
It is important to note that even if a noncompetition agreement is unreasonable, it does not mean the employee can ignore its terms altogether. When an Ohio court finds that a noncompetition agreement is unreasonable, it has the power to strike out the unreasonable portion and rewrite the agreement in order to make it reasonable, and therefore enforceable. For example, a noncompetition agreement prohibiting the employee from competing for life may be rewritten to instead include a more reasonable length of time.
Ohio employees should also understand that an employer can make signing a noncompetition agreement mandatory. Ohio courts have held that an employer does not have to offer its employees anything in exchange for signing a noncompetition contract other than continued employment at-will, which is not for any guaranteed length of time.
Protecting Cleveland Employees Who Have Noncompetition Agreements
Whether or not an Ohio employee has a noncompetition agreement, the employee may have other obligations to his or her former employer imposed by statute. Two important limitations about which employees should be aware are the Ohio Uniform Trade Secrets Act and the Ohio Deceptive Trade Practices Act.
The Ohio Uniform Trade Secrets Act prohibits employees, former employees, and competitors from misappropriating an employer’s confidential trade secrets for profit. See Ohio Revised Code § 1333.63. A “trade secret” includes any business information, process, technique, financial information, customer lists, or anything else that obtains some economic value from being not publicly known, and that the company makes reasonable efforts to keep secret. “Misappropriation” of trade secrets occurs when someone, including former employees, uses theft, bribery, misrepresentation, or other illicit means to obtain a trade secret for financial gain. Misappropriation can also include unauthorized disclosure of trade secrets by current or former employees under certain circumstances. An employee who is found to have engaged in trade secret theft faces significant repercussions under Ohio law, including repayment of any ill-gotten gains, punitive damages, and attorneys’ fees.
The Ohio Deceptive Trade Practices Act also imposes limitations on an employee’s ability to compete with a former employer. Among other things, it prohibits individuals from disparaging the goods, services, or business of another through false statements of fact. See Ohio Revised Code § 4165.02(A)(10). For example, an employee who made false and negative remarks about his or her former employer when soliciting customers for a new employer would run afoul of the Deceptive Trade Practices Act, exposing both himself or herself and the new employer to potential liability.
Advocating for Your Best Interests
At Bolek Besser Glesius LLC, we have more than 40 years of combined experience in in employment law. We can help you review and negotiate a noncompetition agreement or other employment contract in order to protect your interests, and your ability to earn a living.
If you need help from an experienced Cleveland employment law attorney, contact us today or request a free consultation.