Many employees are shocked to learn that the one-paragraph agreement not to compete they signed when they accepted a new job is actually enforceable to prevent them from working in the same industry. These covenants–that is, promises–not to compete are governed by state law, and each state’s law may be different. In Ohio, such promises are generally enforceable if they are “reasonable”, and if they are designed to protect against unfair competition, and not just to stifle competition.
Employment lawyers in Cincinnati and elsewhere across Ohio often get calls from people both in and out of Ohio who have been sued or threatened with sued for alleged breach of a non-compete agreement. People want to know, first of all, if such agreements are enforceable. We often hear, “Well, I talked to a lawyer here in such-and-such a state, and she said she doesn’t think these agreements are really enforceable.”
Wrong! If you have signed a non-compete agreement with an Ohio employer and you go to work for a competitor, and your former employer sues or threatens to sue you, you have a real problem on your hands. The first thing you need to do is contact an experienced Ohio employment lawyer and recognize you will have to pay real money for his or her time and advice.
The next thing to understand is whether or not your non-compete agreement can actually prevent you from working at your new job is a very fact-specific question. It will depend upon many facts only your lawyer can understand and assess, such as what exactly you did for your former employer, what exactly you are doing for your new employer, what special training if any you received from your former employer, what knowledge you have of “trade secret” or proprietary information from your former employer, who the customers are and what the market is, whether the former employer has consistently enforced its non-compete agreements against other employees, exactly what legitimate trade secret or proprietary interest the former employer is trying to protect that would be jeopardized if you work for a competitor, and many other facts.
Employers–and judges–often need to be reminded that just because an employee signed a non-compete agreement does not mean she should be prevented from working for a competing employer. The former employer has to demonstrate it has a genuine protectable interest at stake, and is not just trying to stifle competition. I often use the example of a hamburger-flipper at McDonald’s. If McDonald’s had all of its entry-level kitchen help sign non-compete agreements promising they would not work for Burger King or Wendy’s or another competitor for two years after they leave McDonalds, their promise should not be enforceable. Although learning to prepare hamburgers and fries takes some on-the-job training, there is nothing particularly complicated or “secret” about it, and an employer who trains an employee in most jobs should not expect the employee not to use his skills at a competing restaurant. A non-compete agreement in that context would simply be an attempt to hurt the competition by making it harder for them to find experienced kitchen help. That is not a “protectable interest”, and courts should not enforce non-compete agreements to stifle competition but don’t protect a legitimate trade secret or proprietary business interest.
This concept is sometimes difficult for courts and employers to grapple with because the answer depends upon the specific facts, and it requires a judgment call as to whether the employer’s interest in limiting competition is a legitimate one. Different judges may have different proclivities as to the enforcement of non-compete agreements, and the facts are different in every situation.
This is why your Ohio or Cincinnati employment lawyer may not be able to give you an absolute “yes” or “no” answer to your question about whether your non-compete is enforceable. However, before you make a final decision about signing a non-compete agreement, taking or not taking the new job, or about quitting your new job if you are threatened with a lawsuit, be sure to consult with an experienced Ohio employment lawyer so you have all the facts you need to make an informed decision.