Best Ohio Non-Compete Agreement Attorney Answer: Is a noncompete binding when I just clicked “I Accept” on an online employment agreement? Can a non-signed non competition agreement be enforced if I take sensitive documents and information from my employer?
One of the most commonplace principles of contract law, understood by lawyers and non-lawyers alike, is that in order for a particular contract to be enforced, it generally must be accepted by the person it is being enforced against. Based on this, many employees do not expect to be bound by a noncompete agreement that they may have never actually read, not to mention signed. However, two recent cases have challenged this thought.
In Newell Rubbermaid Inc. v. Sandy Storm, the Delaware Court of Chancery determined that an employee was bound by a noncompete agreement buried in a lengthy compensation agreement. The employee’s argument was that she should not be bound by the noncompete agreement, because she never actually signed it. The compensation agreement in question was what is known as a “clickwrap agreement,” similar to the type of agreement that pops up when you update the software on your computer or mobile device or signup for a social media website. The employee simply clicked “Accept” on a pop-up screen on her computer without reviewing the agreement. The court held:
Newell’s method of seeking Storm’s agreement to the post-employment restrictive covenants, although certainly not the model of transparency and openness with its employees, was not an improper form of contract formation…. Storm admits that she clicked the checkbox next to which were the words “I have read and agree to the terms of the Grant Agreement.” This functions as an admission that she had the opportunity to review the agreement (even if she now states she did not read it despite her representation that she did) upon which Newell was entitled to rely. Her actions of clicking the checkbox and “Accept” button were manifestations of assent…. It is not determinative that the 2013 Agreements were part of a lengthy scrolling pop-up. Storm’s failure to review fully the terms (on a 10-page readily accessible agreement) to which she assented also does not invalidate her assent.
The holding in Newell at least involved someone assenting to a noncompete, even if it was effectively hidden in a lengthy digital document. However, in PharMerica Corp v. McElyea, the United States District Court for the Northern District of Ohio took it one step further and bound an employee to a non-compete even though she did not even assent to one. In PharMerica, it appears that the employee tried to pull a fast one by not signing the agreement:
She dated the non-compete agreement and printed her name on it, but she did not put her normal signature on it. She says she did not intend to sign it. She does not remember sending the non-compete agreement back to PharMerica, but PharMerica has a copy of the non-compete agreement with the same printed date and McElyea’s name printed on it. Although she would have returned the document in February, a Human Resources executive did not sign the agreement until June 2013.
Apparently dissatisfied with her job, the employee copied all of her work files, including client lists, pricing information, and contracts from her work computer to a jump drive. A key fact in this case was that she started copying all this information after she agreed on a deal to go work for a competitor. Shortly after, she resigned to work for a competitor and the company move for a temporary injunction to prevent her from using the material while working with a competitor. The court, in granting the injunction, determined that the employee was barred from certain activity while working for the competitor despite the undisputed fact the employee never signed a noncompete:
Defendants also argued that unless Plaintiff can prove a non-compete agreement exists, the Court may not enter an injunction unless McElyea has already disclosed trade secrets. Some Ohio courts do permit injunctions in the absence of a non-compete agreement and without a prior instance of disclosure when “the former employee possessed timely, sensitive, strategic, and/or technical information that, if it was proved, posed a serious threat to his former employer’s business or a specific segment thereof.” The Court finds that PharMerica has shown its confidential information, if disclosed, would pose a serious threat to its business.
For similar reasons, the Court finds that PharMerica has established a threat of irreparable harm. McElyea participated in the preparation of a list of PharMerica’s most vulnerable clients and had extensive knowledge of PharMerica’s contract terms, termination rights, and marketing strategy. If Absolute Pharmacy could use this confidential information, it could severely damage PharMerica’s business. And McElyea’s improper file copying shows an intent to use her confidential knowledge on Absolute Pharmacy’s behalf. Therefore, the Court finds the threat of irreparable injury suggests an injunction should issue.
Now remember, this was only for an injunction, which will only be in effect until this case is tried to a jury. But, in getting the injunction through the trial date, the essential elements of a non-compete will be in place for about the same period or longer than as designated in the non-signed non-compete agreement.
Thus, courts are beginning to give employers broader power when it comes to exerting noncompete principles to employees that either unknowingly sign noncompete agreements or even never sign a noncompete at all.
If you have found yourself asking, “is my non-compete agreement enforceable?” — or even think that you might need an employment lawyer, then it would be best to call the right attorney to schedule a free and confidential consultation at 866-797-6040 to discuss your non-competition agreement. Spitz, The Employee’s Law Firm and its attorneys are experienced and dedicated to protecting employees’ rights and solving employment disputes over these type of contractual no-compete agreement.
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