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Companies are always trying to do better in business than their competitors. They don’t want competitors to take their customers – or their employees. That’s why you may be asked to sign a noncompete agreement when you start a new job. Before signing, it’s important to talk to an experienced employment attorney to make sure your rights are protected.
The employment lawyers at Gibson Law, LLC used to represent employers for one of the largest law firms in the nation. We understand the concerns employers have about competitors and the issues they consider when drafting these types of agreements. Now, we use our experience and legal knowledge in employment law to protect employees’ rights.
A noncompete agreement – sometimes called a covenant not to compete – may be a separate document or part of a larger agreement such as an employee contract or separation agreement. It is intended to limit competition by putting restrictions on former employees to prevent them from taking away customers and clients.
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These agreements are legally binding and enforceable in Ohio, but there are some general rules that must be followed. For example:
- They must protect a legitimate business interest of the employer.
- The time limit on the restrictions must be reasonable. Agreements typically set a time limit of one or two years.
- The restrictions can only apply to a limited geographical area in which the employer faces competition.
- The agreement must be limited to direct competitors or starting a new business that would be a competitor.
In return for signing a noncompete agreement, you should also receive consideration – some form of financial reward. If you sign the agreement when joining a new company, that consideration is generally considered to be the pay and benefits you receive as an employee. But if you have already been working for an employer and are then asked to sign a noncompete agreement, you are in a good position to ask for a promotion or raise.
In general, only employees who are in a position to learn trade secrets or other proprietary information are asked to sign these agreements. That is information that could potentially be used to benefit a competitor in the future and the company wants to take steps to protect their best interests.
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Though it may not seem like anything to be concerned about now, an agreement that is too broad or too restrictive can eventually affect your ability to earn a living. Though noncompete agreements are standard and legally binding, your employer does not have a right to restrict your future business activities in the long term.
Because a noncompete agreement can affect your career if your employment ends with the company, it’s important to consult an experienced attorney before signing to make sure your interests are protected. A lawyer can carefully review the terms to ensure they are reasonable and appropriate – and negotiate new terms that are less restrictive or that provide more consideration.
Things can change fast in business. Take steps to protect your future now. Learn more about how our law firm can help you. Contact us for a consultation with a member of our legal team at our Cincinnati or Dayton office.