One of the most common types of employment contracts in Ohio is the non-compete agreement. These legal documents are binding contracts between an employer and their employee and they prevent an employee from working for a competing business for a certain period of time. A non-compete agreement stands even if the employee is terminated from their position without just cause.
Non-compete agreements can seriously limit an employee’s ability to obtain employment once they leave their current employer. Violating the contract, though, comes with serious consequences.
Ohio law states that non-compete agreements are enforceable as long they are reasonable. Determining what is reasonable and what is not largely depends on the facts of a specific case. The courts must apply certain legal tests outlined by the Ohio Supreme Court. Non-compete agreements are considered reasonable, if the restrictions contained within it are not:
Whether a non-compete agreement is considered reasonable will depend on a number of factors. The courts will consider the following factors when determining the reasonability of a non-competition clause:
Of the above factors, there are two that are particularly important. The first is the length of time employees are prohibited from working for competing businesses. The majority of non-compete agreements outline a timeframe of six months to two years. With the exception of a few scenarios, the courts will likely not enforce a contract that has a length of more than two years.
The second most important factor is the geographic scope of the contract. The larger the geographical area an employee is prevented from working in, the less reasonable the agreement becomes.
Even when the courts find a non-compete agreement to be unreasonable, it does not mean they will throw out the document entirely. The courts have the authority to strike out certain provisions of an agreement and rewrite them so the document can be deemed enforceable. This is legally known as the “blue-pencil doctrine.” For example, a court may strike out the geographic area which includes the state of Ohio and surrounding states to only include Ohio.
If you have already signed a non-compete agreement or your employer is pressuring you to sign one, our Columbus employment lawyers can review it for you. At Marshall Forman & Schlein, our skilled attorneys can determine if the agreement is fair and if not, help you secure better terms. Call us today or contact us online to schedule a free consultation and to obtain the legal advice you need.
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