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NONCOMPETE CLAUSES ARE AN INCREASING PROBLEM

Randy Freking

Employees are increasingly being asked to sign agreements that prohibit them from working for a company’s rivals, according to a June 8, 2014 column in the New York Times.The particular situation highlighted in the article illustrates this problem.

Colette Buser is a 19 year old college student who worked as a counselor the three previous summers at a camp in Wellesley, Massachusetts. When she applied for another summer camp job this year, the summer camp withdrew an offer of employment to her because it feared that her previous summer camp would sue to enforce a noncompete clause tucked into Ms. Buser’s 2013 summer employment contract.

Noncompete clauses now appear in far more employment fields beyond the traditional worlds of technology, sales, and major corporations with tightly held secrets. The clauses appear to be extending to nearly every field of employment, from event planners to chefs to yoga instructors. Ironically, they are often required by employers who hail “competition” as a bedrock of our economic system of course, when it benefits them.

Prospective employees being asked to sign noncompete agreements should recognize that noncompete agreements are governed by state law. Courts in Ohio, Indiana, and Kentucky have differing rules regarding the enforcement of noncompete agreements and employees should understand those restrictions before signing noncompete agreements.

The good news is that some courts are becoming increasingly hostile to full enforcement
of noncompete agreements because employers often overreach by including unreasonable geographic and time limitations in the clauses. Any employee who has a noncompete agreement and wishes to seek other employment should fully understand their rights and the laws governing the noncompete agreements, depending upon the particular jurisdiction.

 

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