A noncompete agreement can be a great way for businesses in Ohio to protect their interests and keep their competition from gaining an edge.
However, the Federal Trade Commission (FTC) just unveiled a new rule which may ban noncompete agreements all over the country. How could this affect your business?
What does the new rule entail?
The FTC’s looming Noncompete rule seeks a ban on new agreements throughout the country. This could apply to all workers, including senior executives.
Furthermore, it may also invalidate all existing noncompete agreements except for those on senior executive positions. It could take effect on September 4, 2024.
It is important to note, however, that this rule is not yet final, and its status remains up in the air. Ohio businesses can still benefit from noncompete agreements.
Noncompetes can be enforced in Ohio
Your business can enforce a noncompete agreement as long as it is valid. For it to be valid, it must:
- Have reasonable limitations on the timeline, location and services when restricting a worker from entering new employment
- Come with another agreement such as employment or financial compensation
- Safeguard your company’s business interests
If your noncompete agreements meet these requirements, you could enforce them to protect your business. It may prevent:
- Former employees from disclosing your business’ sensitive information and secrets
- Rival businesses from poaching your employees
- New competition from arising
While the FTC’s rule may change the landscape for business competition if it comes to pass, it is not yet final. Your Ohio business can benefit from noncompete agreements, but it may also be beneficial to look into other ways to protect your company’s interests.