Non-compete agreements are legal contracts between an employer and an employee or between two parties in a business transaction. They work by restricting an employee or party from engaging in certain competitive activities, such as working for a competing company or starting a competing business, for a specified period and within a defined geographic area after the termination of employment or the business relationship.
Non-compete agreements are generally considered legally enforceable in Ohio, but they must meet certain criteria to be upheld by the courts. Ohio law provides a framework for the enforcement of non-compete agreements, and it’s important to understand the key aspects of these agreements in the state.
The agreement must be reasonable
A non-compete agreement is only enforceable if it is no greater than necessary to protect legitimate business interests. In other words, the terms of the agreement, including the duration, geographic scope and restricted activities, should be in proportion to the interests being protected.
It must not impose undue hardship on the employee
If a non-compete agreement is overly restrictive and unreasonably limits the employee’s ability to find suitable employment after the termination of the current job, it may be considered unenforceable.
It should not be detrimental to the public
Non-compete agreements should not harm the general welfare of the community. If enforcing a non-compete agreement would result in a significant detriment to the public, such as suppressing competition to an unreasonable extent, the court may be less likely to uphold the agreement.
Avoid costly mistakes with a non-compete agreement
Whether you are an employer drafting a non-compete agreement or an employee faced with one, it is essential to consider the legal nuances and potential implications. Seeking legal guidance is advisable to help protect your interests and take informed action.