Are you subject to a non-competition, non-solicitation, or non-disclosure agreement? Do you know the difference among them? Are you wondering whether yours is enforceable under Ohio law?
Many employers attempt to protect themselves against their former employees competing against them, soliciting their customers and employees, and/or disclosing their confidential information by requiring employees—either upon hire, or as a condition of continued employment—to sign non-competition, non-solicitation or non-disclosure agreements; and some employers require employees to sign agreements containing all three provisions. Each of these provisions carries with it different obligations under the law, and it is important to know the distinctions.
Generally speaking, a non-competition agreement is a promise from the employee that the employee will not work for a competitor or compete with the employer after employment has ended. Most non-competition agreements are limited to a specific scope of time (typically between one to two years) and a specific geographical location (e.g. Hamilton County or the State of Ohio), although this varies from agreement to agreement. Of the three types of provisions, non-competition agreements place the greatest obligations on employees, because it prevents an employee from working in the same industry as the former employer for a certain period of time and/or a certain place.
A non-solicitation agreement is slightly narrower; it does not prevent an employee from working for a competitor, but it usually prevents an employee from soliciting the former employer’s customers and/or employees after employment. These types of provisions typically are limited to a specific scope of time, but do not contain geographical limitations. Thus, while an employee can still work in the same industry, the former employer’s customers, clients and/or employees are off limits for a period of time.
Non-disclosure agreements are designed to prevent employees from using an employer’s confidential information to gain an unfair competitive advantage against the former employer. These provisions obligate an employee to refrain from using or disclosing any of the proprietary information of the former employer if the employee decides to work for a different employer, or while trying to solicit the former employer’s customers. Regardless of whether the employee has signed a non-disclosure agreement, however, employees are also prohibited from using or disclosing an employer's trade secrets under state law.
To the extent these provisions are reasonable, Ohio courts will enforce them, and will even modify the terms of the agreements (to the extent possible) to make them reasonable and enforceable. However, there are a number of defenses an employee can assert against an employer's claim that these agreements have been violated. If an agreement is not carefully crafted or the employer engages in certain conduct, then enforcement of these agreements may be limited or unsuccessful in its entirety.
Sadlowski & Besse L.L.C. is able to provide both employers and employees with specific guidance regarding enforcement of these types of agreements under Ohio law.
We are conveniently located in Blue Ash, which is an easily accessible suburb of Cincinnati, OH.