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What is a noncompete agreement?
A noncompete is an agreement, usually between an employer and an employee, in which the employee agrees not to engage in any activities that compete with the employer’s line of business, both during the person’s employment and for some period of time after the employment relationship has been terminated. However, noncompete clauses are also used in a variety of other business contracts. For example, we have seen noncompete clauses used in operating agreements to prohibit business partners from starting a competing business venture on the side. Noncompete clauses are also used in business purchase agreements to prevent the sellers of a business from starting a new business that competes with the one they just sold. 

Are noncompete agreements enforceable?
In Ohio, noncompete agreements are generally enforceable as long as they are “reasonable.” So what makes a noncompete agreement reasonable in Ohio? 
  • The restrictions imposed on the former employee can be no greater than is required to protect the employer’s legitimate business interests. 
  • The restrictions cannot impose an undue hardship on the former employee. 
  • The restrictions cannot injure the public.
     
When evaluating a noncompete, the courts consider a variety of factors:
  • The length of time and the geographic scope of the restrictive covenant
  • Whether the employee was the sole contact with the customer/client 
  • Whether the employee’s skills were developed during their employment with the employer seeking to enforce the noncompete 
  • Whether the employee gained access to trade secrets or confidential information during their employment 
  • Whether the noncompete is designed to restrict unfair competition (as opposed to ordinary competition)

A good noncompete agreement will address these factors in the contract itself. This is one of the many reasons we advise against using online form documents that don’t address your unique situation with a particular employee. 

How do I protect my business if a noncompete clause isn’t appropriate?
Not every employment situation calls for a noncompete agreement or clause. Instead, your business might consider using a non solicitation agreement to prohibit current and former employees from soliciting your customers, clients, key vendors, etc. 
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Learn more about Non Solicitation Agreements and how they differ from Noncompete Agreements and NDAs.
​Flat Fee Pricing:
Non-Compete / Non-Disclosure / Proprietary Information Agreements: $625

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