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[OH] Can a non-compete agreement that restricts someone from working in their entire industry be enforced?
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I'm wondering about my non compete contract with my employer in Ohio.
I understand that dealing with a non-compete contract can be stressful. Can you tell me how long you have been employed with your current employer?
Just under 1 year.
Have you already signed the non-compete agreement, or are you still in the process of negotiating it?
I was required to sign it when I started.
Is there anything else the Employment Lawyer should know before I connect you? Rest assured they'll be able to help with your non-compete contract.
No.
Thank you for choosing our service! My name is Jessica and I am a licensed attorney that will be assisting you with your question. I understand you're dealing with a situation involving a non-compete contract with your employer in Ohio, which you signed when you started less than a year ago. Have you considered any specific actions or legal steps you might take in response to this situation?
I'm wanting to leave my position but would rather stay in the city I am in instead of leaving the state. Reading basic employment law I don't have any trade secrets, don't deal with customers, but there's a clause claiming that the agreement doesn't hinder me using my skills. I'm a TV director, so my skills are my career.
Could you tell me how long the non-compete agreement is supposed to last and what geographic area it covers?
It is a full year starting at termination, and it's the DMA of Cleveland (pretty much the entire north east of Ohio)
Attachment B, Offer of Employment Restrictive Covenants. Restrictive Covenants. You agree that, while employed by the Company and for the one-year period following termination of employment, regardless of the reason for termination: 1. You shall not perform any activities that are the same as or similar to the services you performed for the Company within the one-year period preceding the termination of employment for or on behalf of any Competitor without the express prior written consent of the Company (which consent may be withheld at the Company's discretion). For purposes of this Section, the term "Competitor" means any television station, radio station, cable television facility or program or any other video delivery system (including, without limitation, broadcast, cable, satellite or internet) that competes with the Company for viewers, advertisers or the like within all or any portion of the Designated Market Area (DMA) of the Station (as currently defined by Nielsen Media Research) other than the Company or any entity that owns, is owned by or controlled by, or licensed to, the Company. 2. You shall not (directly or indirectly), on behalf of yourself or any other person or entity, hire, solicit, take away or attempt to hire, solicit or take away any person who is (or in the preceding one (1) year was) an employee, director or independent contractor of the Company or its affiliates and shall not induce or attempt to induce, or influence or attempt to influence, any person employed by Company or its affiliates to terminate his or her employment with the Company or its affiliates. 3. You shall not, on your own behalf or on behalf of any other person or entity, directly or indirectly, (whether as employee, consultant, investor, partner, sole proprietor or otherwise) induce or attempt to induce any current or potential customer or client of the Company to cease doing business with the Company, or in any way interfere with the relationship between any such customer or client and the Company. The restrictions in this Section 3 apply only to customers, potential customers or clients with whom you or individuals you supervised had any material contact during the one-year period preceding your termination of employment. For purposes of this Section, "material contact" includes any contact in person and any written or oral communication in furtherance of the business interests of the Company. 4. You acknowledge and agree that you have carefully considered the nature and extent of the restrictions upon you and the rights and remedies conferred upon the Company under these Restrictive Covenants, and hereby acknowledge and agree that the same are reasonable in time and territory, are designed to eliminate competition which otherwise would be unfair to the Company, do not stifle your inherent skill and experience, are fully required to protect legitimate interests of the Company, and do not confer a benefit upon the Company disproportionate to the detriment to you. Each of the above-recited covenants shall be deemed and shall be construed as a separate and independent covenant. Any court of competent jurisdiction which determines that the above-recited covenants or any portion thereof are overbroad or otherwise unenforceable may reform or revise such covenants to the extent necessary to conform with existing law, such that the revised covenants, or portions thereof, shall be read as broadly as the law allows. Should any part or provision of any such covenants be reformed or declared invalid, such reformation or invalidity shall in no way render invalid or unenforceable any other part or provision thereof or any other separate covenant not declared invalid. You agree that your breach of any restrictive covenant in this Attachment B will cause the Company irreparable injury that cannot be adequately compensated by monetary damages alone. Therefore, you agree that the Company, without limiting any other legal or equitable remedies available to it, shall be entitled to obtain equitable relief by injunction or otherwise from any court of competent jurisdiction, including, without limitation, injunctive relief to prevent your failure to comply with the terms and conditions of this Attachment B. The one-year period referenced in Sections (1), (2) and (3) shall be extended on a day-for-day basis for each day during which you violate the provisions of Section (1), (2) and (3) in any respect, so that you are restricted from engaging in the activities prohibited by those Sections for the full one-year period.
Based on your situation, there are several legal arguments and considerations in Ohio that could potentially support your case:
Non-compete agreements in Ohio are generally enforceable if they are reasonable in scope, duration, and geographic area. Ohio courts apply a reasonableness test, drawn from the Ohio Supreme Court's decision in Raimonde v. Van Vlerah, which asks whether the restriction is no greater than necessary to protect the employer's legitimate business interests, does not impose undue hardship on the employee, and is not injurious to the public.
The agreement you described restricts you from working in the same or similar capacity within the Cleveland DMA for one year after termination. Courts in Ohio will typically evaluate whether such restrictions are necessary to protect the employer's legitimate business interests, such as trade secrets or customer relationships, and whether they impose an undue hardship on the employee.
The clause stating that the agreement does not hinder you from using your skills is significant. Ohio courts may consider whether the non-compete agreement unfairly restricts your ability to work in your chosen profession, especially if your skills as a TV director are your primary means of livelihood.
Additionally, the agreement's enforceability may depend on whether the restrictions are broader than necessary to protect the employer's interests. If a court finds the restrictions unreasonable, it may modify the agreement to make it enforceable, since Ohio follows the "blue pencil" or reformation approach rather than voiding an overbroad covenant outright.
Let me know if you have any questions or clarifications.
2 questions:
- resignation is still considered termination in this situation
- how could I protect myself from litigation.
- Resignation as Termination: Yes, in most cases, resignation is considered a form of termination under non-compete agreements. This means that the restrictions outlined in your agreement would typically apply after you resign from your position.
- Protecting Yourself from Litigation:
- Review the Agreement Thoroughly: Make sure you fully understand the terms of your non-compete agreement. Pay close attention to any clauses that might allow for exceptions or modifications.
- Negotiate with Your Employer: If possible, try to negotiate with your employer for a release or modification of the non-compete clause. They may be willing to make adjustments, especially if you can demonstrate that your new role won't harm their business interests.
- Document Everything: Keep detailed records of all communications with your employer regarding your resignation and any discussions about the non-compete agreement. This documentation can be crucial if any disputes arise.
- Consider Alternative Employment: Look for job opportunities that don't directly compete with your current employer or fall outside the restricted geographic area. This can help you avoid potential legal issues.
- Prepare for Possible Litigation: If you believe your employer might pursue legal action, discuss potential defenses with your lawyer. They can help you build a case that the non-compete is overly restrictive or unenforceable.
Please let me know if you have further questions.
The way I read it, me working in any form of media is a violation of the contract. Am I understanding that correctly?
Based on the language in your non-compete agreement, it does seem that working in any form of media that competes with your current employer within the Cleveland DMA could be considered a violation. However, the enforceability of such a broad restriction can depend on various factors, including whether it is deemed reasonable by a court.
I hope I was able to help clarify your situation! If you have any other questions, feel free to ask. Don't hesitate to reach out whenever you need assistance!
Is there a way I can find out if a court would deem it unreasonable before I decide my next steps, or is that a risk I would have to take?
Unfortunately no, since there are so many factors and every judge is different.
Just to recap: my options are to move DMA to avoid any risk, or to take the risk of litigation and stay within the DMA and hope they either 1) don't follow through with litigation or 2) a judge finds it unreasonable.
Yes, you've summarized your options well. You can either move outside the DMA to avoid any potential risk of violating the non-compete agreement, or you can choose to stay within the DMA and take the risk of potential litigation.
If you decide to stay, you would be hoping that either your employer does not pursue legal action or that a court finds the non-compete agreement unreasonable and unenforceable.
If you have any more questions or need further assistance, feel free to ask.
Okay, thank you for your time.
You're welcome! I'm glad I could assist you. If you have any more questions in the future, feel free to return to the site. Don't hesitate to reach out whenever you need assistance. Take care!
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