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An overview of non-compete agreements in Ohio

On Behalf of | May 18, 2015 | Contract Disputes |

The saying, “Knowledge is power” is one that many businesses in this state understand even if they never utter those words. In the present-day information era, often what is most important to a company’s profitability or even its survival consists of data, processes, customer lists, trade secrets and other intangibles that cannot be physically removed from the employer’s premises but which can be taken away in the experience and knowledge of departing employees. The loss of key information to a competitor can spell disaster for a business if a former employee divulges it without any concern for the consequences to his former employer or to himself.

For many years, businesses that need to protect sensitive information and to prevent the loss of customers to competing companies have relied on non-compete agreements to protect them. The purpose of these agreements, which an employee enters into with his employer as a condition of initial or continued employment, is to prohibit that employee from revealing proprietary or confidential information of his former company to his new employer.

Some people do not like non-compete agreements as a matter of some personal principle. Others consider them to be unenforceable.  But as long as the agreement is reasonable in its terms — such as its duration and its geographic scope — Ohio courts will generally uphold their legality and enforce them if a former employee breaches their terms or conditions. Remedies for such a breach of contract can be injunctive (for example, prohibiting the former employee from sharing certain knowledge) or even monetary if the former employer can quantify its losses in dollar values.

As indicated in the paragraph above, the operative term in any non-compete agreement is “reasonable.” Any employer that wants to draft a non-compete agreement, or any employee being asked to sign one, would be well-advised to have the non-compete agreement reviewed by an employment attorney licensed in this state before entering into it to make sure that it is indeed legally reasonable in its protections, its scope and its potential remedies or penalties.


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