Employees working for a business provide important services, but they are also in a position to damage the company in question. Sometimes, an employee with access to trade secrets and information about how a company operates may use that knowledge to start a competing business or obtain a better job with an existing competitor.
Employers may seek to protect themselves by including non-compete agreements in initial employment contracts or severance agreements. Despite signing such agreements, workers may still engage in inappropriate conduct after leaving a job.
How can Ohio businesses effectively enforce non-compete agreements?
By gathering evidence
Proving that an employee has unfairly competed can sometimes be relatively simple. They may have already established an online presence representing their new business or may have updated their social media to indicate that they now work for a direct local competitor. Organizations typically need to review their non-compete agreements to validate the terms included in them and then gather as much documentation of the violation as possible.
By initiating litigation
Non-compete agreements require enforcement through the civil courts. Employers do not have any authority to directly prevent an employee from running a business or taking a job. The civil courts, however, can issue injunctions preventing certain economic activity. They can also award damages or enforce penalty clauses that impose financial consequences for breaching an employment arrangement.
Although there have been discussions about banning non-compete agreements at the federal level, they currently remain theoretically legal in most states. Ohio does allow employers who need non-compete agreements to protect their competitive edge to have certain workers sign non-compete agreements.
An agreement generally needs to be reasonable to be enforceable. For example, the courts expect a limited period of applicability, often falling between six months and two years. It also shouldn’t be so broad as to create undue hardship for the worker or injury to the public. Additionally, it should not go beyond what is necessary to protect the employer.
Employers who experience unfair worker competition can take action to fight back. They may be able to enforce their agreements via litigation in certain circumstances. Enforcing a non-compete agreement through civil litigation may help employers end misconduct that could harm the company and prevent others from following a negative example.