Non Compete Agreements in Ohio

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Non-Compete Agreements in Ohio: Understanding the Basics

Non-compete agreements, also known as non-competition agreements or restrictive covenants, are becoming increasingly common in today`s competitive business environment. These agreements are contracts between an employer and an employee that limit the employee`s ability to compete against the employer after leaving the company. While non-compete agreements can be a useful tool for employers, they also raise concerns about fairness and legality.

If you are a business owner or an employee in Ohio, it is important to understand the basics of non-compete agreements and their limitations under Ohio law.

What is a Non-Compete Agreement?

A non-compete agreement is a contract between an employer and an employee in which the employee agrees not to compete with the employer`s business after the employment relationship ends. Typically, these agreements prohibit employees from working for a competitor or starting a competing business in a specified geographic area for a certain period of time.

Non-compete agreements are often used to protect an employer`s trade secrets, customer relationships, and other valuable information. For example, a non-compete agreement may prevent an employee from taking a job with a competitor and using confidential information learned at the previous job to benefit the new employer.

What are the Limitations of Non-Compete Agreements in Ohio?

While non-compete agreements are generally enforceable in Ohio, there are limits to what employers can include in these agreements. In Ohio, non-compete agreements must meet certain requirements to be enforceable, including:

– The agreement must be supported by valid consideration, such as the employee receiving something of value in exchange for agreeing to the non-compete.

– The agreement must be necessary to protect the employer`s legitimate business interests, such as trade secrets or customer relationships.

– The agreement must be reasonable in terms of duration, geographic scope, and the type of activity prohibited.

Ohio courts have generally held that non-compete agreements of up to two years and a geographic scope limited to the employer`s customer base or geographic area are reasonable. However, each case is evaluated on a case-by-case basis, and courts will consider the specific facts of each situation.

It is also important to note that Ohio law prohibits non-compete agreements for certain professions, including physicians, lawyers, and broadcasters. Additionally, Ohio law provides that non-compete agreements cannot be enforced against employees who are terminated through no fault of their own, such as through a layoff or plant closure.

What Should Employers and Employees Know About Non-Compete Agreements?

For employers, it is important to carefully consider whether a non-compete agreement is necessary and to ensure that the agreement meets the requirements under Ohio law. Employers should also be aware that overly broad or unreasonable non-compete agreements may be unenforceable and could result in legal liability.

For employees, it is important to carefully review any non-compete agreement before signing and to understand the potential consequences. Employees should also be aware of their rights under Ohio law and should consult with an attorney if they have questions about the enforceability of a non-compete agreement.

In conclusion, non-compete agreements can be a useful tool for employers to protect their business interests, but they must be carefully crafted to meet the requirements under Ohio law. Employees should be aware of their rights and should carefully consider any non-compete agreement before signing. As with any legal matter, consulting with an experienced attorney can help ensure that your interests are protected.