A noncompete agreement prevents an employee or possibly a business partner from directly competing with the company at issue. These restrictive covenants often take effect after the end of a working relationship.
When a business partner agrees to a buyout or when a worker leaves their job, they may need to avoid starting a competing business or working for a direct competitor. Noncompete agreements have been subject to scrutiny and controversy in recent years due to their impact on workers.
Can businesses in Ohio still enforce their noncompete agreements?
Valid agreements are still enforceable
Federal attempts to prohibit employment noncompete agreements have failed due to court rulings. While Ohio state lawmakers have proposed major restrictions on noncompete agreements, the law has not yet changed.
So long as the agreement is reasonable, a former business partner or employee could face litigation intended to enforce the terms of a non-compete agreement. Typically, noncompete agreements should only apply to a specific geographic area.
They are also only enforceable for a limited amount of time after the end of a working relationship. Typically, non-compete agreements are only enforceable for up to two years after the end of an employment arrangement or up to five years after a business partner sells their interest in the company. A successful enforcement lawsuit could result in an injunction preventing continued competition or an award of damages.
Reviewing original agreements and any violation of a noncompete with a skilled legal team can help business leaders evaluate their options. Initiating business litigation is often necessary when a former employee or business partner unfairly competes against a company.
