Make sure your Non-Compete Agreements are Enforceable
Non-compete agreements have been the subject of much litigation and controversy in recent years. Some states have even gone so far as to ban the use of non-compete agreements altogether.
Ohio still allows for the use of non-compete agreements as long as they are “reasonable.” In addition to ensuring your non-compete agreement contains reasonable terms, here are some other considerations to ensure the agreement is enforceable.
Limit the size of the group
It’s important to avoid creating a blanket non-compete agreement for every member of your company. The janitorial staff is unlikely to take your trade secrets to a competitor. Also, some members of your team may be exempt from a non-compete agreement. For example, you cannot restrict in-house attorneys in Ohio. See Supreme Court Advisory Opinion . Courts are more likely to uphold a non-compete agreement if you limit them to employees who have access to sensitive company information.
Narrowly tailor the restrictions
The reasonableness of a non-compete agreement often turns on how broad or narrow the restrictions may be. A five-year, worldwide restriction on employees taking a job with a similar company is too broad. Limit the time of the restriction and keep it confined to a specific geographical area. You should focus on the minimum steps you can take to protect the interests of your company.
Provide written proof
An oral non-compete agreement has the potential to be a legal nightmare. Put your agreement in writing. Both parties should be required to sign the document. You should also consider providing employees time to consult with a lawyer before they sign anything.
A skilled business law professional can help you draft a valid and enforceable agreement.