Best Ohio Non-Compete Employment Attorney Answer: What should I do if I am being sued for beach of a no-competition contract? Can my boss enforce a non-compete agreement that I was forced to sign? What if my company gave me no additional pay or benefits and told me if I didn’t sign, I’d be fired?
Lately, I’ve had a number of potential clients call regarding non-compete agreements they signed with their employer. We’ve blogged about non-competes here before, but they are increasingly common. Odds are that you will be asked to sign one at some point in your career, so it’s material well worth knowing.
A non-compete agreement (also known as a non-compete clause or a covenant not to compete) is a contract between you and your employer in which you agree not to work for a competitor of your employer or in the same industry as your employer after you leave your current job.
Typically, employers require new hires to sign non-competes before they even begin working. In other instances, employees are asked by their bosses or managers to sign a non-compete agreements at some point after they’ve already started. But in both scenarios the employee is typically given very little choice: if you want to keep your job, you have to sign.
Probably for that reason, clients that I talk to often report that they didn’t pay very close attention to the language of their non-compete. But then they either resign or quit, and their boss tells them that he or she plans to enforce the non-compete agreement. And suddenly, the employee realizes that non-competes put limits on where he or she can work after leaving that job.
None of this feels very “fair” – if you are forced to either sign the agreement or be fired, will a court really hold you to the non-compete agreement? In every single state other than California – including here in Ohio – the answer is yes, as long as the agreement is “reasonable”. If a court finds the provision unreasonable, it will either strike it completely or, more commonly, it will re-write the provision to make it reasonable. A non-compete is reasonable only if the restrictions it puts on you are no greater than what is required to protect your former employer’s legitimate business interest and does not impose undue hardship on the employee.
So, what about that single mother? The court in King v. Head Start Family Hair Salons, Inc., addressed this issue and held that the agreement was too broad:
King’s most persuasive argument is that the geographic restriction contained in the noncompetition agreement imposes an undue hardship on her. King argues that the restriction – that she may not be employed by a competing business within a two-mile radius of any Head Start facility – may appear insignificant, but under the circumstances here presented, the restriction is unduly burdensome. Specifically, King states that she is 40 years old, that she has been in the hair-care industry for 25 years, and that it is the only industry in which she is skilled and the only industry in which she can find employment. She further states that, as the trial court found, Head Start has 30 locations throughout the Jefferson County and Shelby County area, making it virtually impossible for her to find employment in the hair-care industry at a facility that does not violate the terms of the noncompetition agreement. According to King, the geographic restriction constitutes a blanket prohibition on practicing her trade. King argues that she will be unable to support herself and her daughter if the geographic restriction is upheld. …
King’s circumstances are unique. When she signed the noncompetition agreement, there were approximately 15 Head Start facilities located throughout Jefferson and Shelby Counties. Now there are approximately 30 facilities located throughout the area, dramatically increasing King’s difficulties in finding employment in the hair-care industry that does not violate the noncompetition agreement. It cannot reasonably be argued that King, at the age of 40 and having spent more than half of her life as a hair stylist, can learn a new job skill that would allow her to be gainfully employed and meet her needs and the needs of her daughter.
Did this mean that the non-compete agreement could be ripped up and ignored? No. Courts have a special power when it comes to no-competition contracts that is called blue-lining. This means that a court can change some of the terms of the no-compete to make it fair for both parties. This is what the court did in King:
Head Start is nevertheless entitled to some of the protection it sought in the noncompetition agreement. Head Start has a valid concern that King would be able to attract many of her former Head Start customers if she is allowed to provide hair-care services unencumbered by any limitations. “An agreement in restraint of trade may be divisible. An unreasonable limitation or restriction may be stricken . . . .” * * * Furthermore, “a court of equity has the power to enforce a contract against competition although the territory or period may be unreasonable, by granting an injunction restraining the respondent from competing for a reasonable time and within a reasonable area.” * * * To prevent an undue burden on King and to afford some protection to Head Start, the trial court should enforce a more reasonable geographic restriction – such as one prohibiting King from providing hair-care services within a two-mile radius of the location of the Head Start facility at which she was formerly employed or imposing some other limitation that does not unreasonably interfere with King’s right to gainful employment while, at the same time, protecting Head Start’s interest in preventing King from unreasonably competing with it during the one-year period following her resignation.
So what does this all mean to you?
- Non-competes matter. Even if you feel like you are being “forced” to sign a non-compete, make sure you understand what you are being asked to sign.
- Reasonableness varies from case to case. There is no one-fits-all “legitimate business interest” to protect, nor is “undue hardship” the same for every employee. You need to give your lawyer all the facts so she can determine whether the non-compete satisfies those tests in your case. But, if the non-compete limits you to say 10 miles for one year, most courts will not care if you are a single mother raising six kids, because the no competition agreement would only require you only drive and extra 15 to 20 minutes for a year. This would likely be found reasonable when weighed against your former employer’s interest in protecting its business.
- If there is any way to re-write the restrictions in a non-compete to make them reasonable, a court will enforce the modified agreement. From a practical standpoint, the factors most likely to be re-written are the time and geographic scope restrictions. Remember that hairdresser? She still had to abide by her non-compete. However, the court re-wrote the agreement so that she was only prohibited from working as a hairdresser within two miles of the salon at which she had been working, not two miles from any salon owned by her former employer.
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. The Spitz Law Firm and its attorneys are experienced and dedicated to protecting employees’ rights and solving employment disputes over these types of contractual no-compete agreement.
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