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Is my noncompete agreement enforceable in Ohio?

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Robert J. Dubyak - Business Litigation - Super Lawyers

Answered by: Robert J. Dubyak

Located in Cleveland, OHDubyak Nelson, LLC

Cleveland, OH
Phone: 216-364-0500

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Everyone has the right to employment. The first thing to do to determine if a noncompete agreement is enforceable is to read it carefully and to determine which type of restrictive covenant it is. Some agreements prohibit employment with certain organizations. Others prohibit specific actions. Any agreement is enforceable unless it can be proven to cause undue hardship to the employee.

There are two primary types of restrictive covenants that people confuse when asking this question. A noncompete agreement is a basic form that prevents a person from actually working for a competitor. A nonsolicitation agreement prevents a person from soliciting or contacting the employer’s customers after leaving the company. In general, nonsolicitation agreements are enforceable, while noncompete agreements are reviewed on a case-by-case basis. It comes down to the balance between an employer’s business needs and an individual’s ability to earn a living.

Determining undue hardship

Enforceability depends on the concept of undue hardship that affects both parties. From a business perspective, the agreement requires a legitimate business purpose for prohibiting movement to a competitor. This often involves knowledge of confidential information, such as business practices that, if shared, would be detrimental to the previous employer’s business. From the former employee’s perspective, undue hardship means that the agreement makes it difficult for the him or her to earn a living.

Many factors come into play

Determining undue hardship is a fact-intensive process. It is a case-by-case area of law that depends on many circumstances, including specifics related to the field of industry, geography, the local job market, the length of the restriction and more. The analysis will measure the needs of the business against the needs of the individual.

A noncompete agreement is a contract between employer and employee. The circumstances of how and when the contract was signed may influence its validity. Ohio state laws also prevent an employee from disclosing trade secrets, which means that a business is protected against certain sharing of information even if no agreement was signed.

Different ways to find a solution

Even when a noncompete is contested, there are options besides going to court. In many industries, such as in health care, negotiation can provide a favorable solution for both parties. In any noncompete agreement, the details are unique to the individual case and require thorough examination.

While many people assume that a noncompete clause is unenforceable, that is often not the case. People often sign such agreements without realizing the significant ramifications. If there are questions about the enforceability of a noncompete, it is important to consult with an attorney for specific advice because there are few generalizations in this area of employment law.

Disclaimer: The answer is intended to be for informational purposes only. It should not be relied on as legal advice, nor construed as a form of attorney-client relationship.

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