When an employer creates a contract with an employee, they may include a non-compete clause. A non-compete clause states that the employee cannot go to work for another competing employer for a set period of time or within a particular geographical area after their employment with the current employer ends.
A non-compete agreement may also include stipulations regarding soliciting the current employer’s customers and prohibiting the use of any confidential information or insights they have learned, which their new employers could use to their advantage.
What does the law say about non-compete agreements?
Generally, it is difficult for a business to win favor in the courts over non-compete agreements. In some states such as California, they are particularly disfavored and using them in an employee’s contract can only be done in a very restrictive way.
In Ohio however, non-compete agreements are binding and enforceable by law, and if an employee agrees not to compete, even if they do not receive anything from the employer as an incentive (or “consideration” as it is known in legal terms), the employee is still bound to their promise.
In Ohio, an employer has the right to enforce a non-compete clause even if they have not done so with previous employees in the past. In short, if an employee signs a non-compete agreement, they are legally obliged to stick to the terms – should the employer choose to enforce it.
Are there any defenses against non-compete clauses?
In some instances, the law recognizes that limitations must be placed on non-compete agreements and there may be cases where the law finds in favor of the employee if the agreement is determined to be unreasonable. Employers should always seek legal advice before drafting non-compete clauses to ensure they are enforceable in court.
What should you do if asked to sign a non-compete agreement?
Employees should also seek legal counsel if they are asked to sign a non-compete agreement. A person is not obligated to sign one. However not doing so may mean an employer withdraws their offer of employment, or the current employment may be terminated. Whether it is legal to do so depends on the facts of each case and the laws of different states.
If your boss asked you to sign a non-compete agreement, the experienced attorneys at DeWitt law can let you know if it is legally binding. Get in touch with our professional and friendly team for a free consultation today.