Noncompete agreements are very common and are typically entered into as a condition to employment or another business relationship. A noncompete agreement, also known as a covenant not to compete, should contain a period of time that the restrictions last and include geographical restrictions. For example, a dentist may not work for a competing dentist, or open their own practice, for a period of 2 years and within 7 miles of their previous employer’s business. Noncompete agreements have been enforceable in Ohio since the 1940s, but they must be considered “reasonable,” as that term has been defined by the courts. Depending on the circumstances, a restriction of 10 years and 100 miles may not be reasonable and could be contested in court.
Employees searching for a new job, and potential new employers, should keep the noncompete restrictions in mind. An employee can be sued or can be kept from taking a new position during the specific time period negotiated in the noncompete agreement. If the new employer has knowledge of a noncompete agreement and hires an employee in violation of that agreement, the employer exposes themselves to possible civil claims of tortious interference with a contract.
We recommend that noncompete agreements are reviewed by attorneys for both parties, to make sure all restrictions are reasonable for both parties involved before signing. It is also important that employees review their contracts carefully and consult with an attorney before leaving a current job to work for a competitor to make certain they are not violating any contractual restrictions they may have. Informing a prospective employer about current noncompete agreements with employers will also help avoid potential future issues. Prospective employers are being advised to request this information in order to avoid exposing themselves to unnecessary liability.
For more detailed information about noncompete agreements and how they impact you as an employee or as an employer, look for our upcoming newsletter for a full article or contact the attorneys at Thomas Law Group with specific questions.
