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When might you be able to enforce a noncompete clause?

If you are like many business owners in Cincinnati, you may have used a noncompete clause in your employee contracts to protect the interests of your company. However, now, you have discovered that a former employee has broken the terms of the noncompete agreement he or she signed. Can you take him or her to court and enforce the document?

The answer, according to the Ohio State Bar Association, depends on several factors, such as how limiting the noncompete contract is to the employee. Is the geographical area and time frame kept within reasonable limits? Could the contract violation pose a legitimate threat to your business by utilizing your trade secrets or luring your customers away? Would consumers be adversely affected by the violation? If so, you might be able to legally enforce the terms of the noncompete.

For example, if you have a roofing company and one of your employees quits to start his own roofing business in the same city, yours might by harmed if he wins over your customers. A reasonable noncompete agreement might restrict him from starting a roofing company within 50 miles of your own for three years after he leaves your employment.

Depending on the terms of the clause, the court may modify some restrictions to make it fair for your former employee, while still allowing you to enforce some points. The most common modifications include lowering the time period or narrowing the geographical range. A noncompete clause that prevents former employees from working in the same field several states away would likely be considered too restricting, since it severely limits the employee from finding work elsewhere.

Creating a noncompete contract that is fair to your employees may prevent future legal hassles. This information is meant to be general in nature and should not take the place of legal advice.

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