Under current Ohio law, the answer generally depends on the language of the agreement, the circumstances surrounding the employment relationship, and the nature of the restriction. Ohio generally permits non-compete agreements, but employers cannot automatically enforce every restriction simply because it bears a signature. Courts evaluate whether the restriction is reasonable and necessary to protect legitimate business interest, rather than merely preventing an employee from competing or earning a living.

Meanwhile, Ohio lawmakers continue to consider legislation that could limit the use of non-compete agreements, including Senate Bill 11 and Senate Bill 301. These proposals reflect growing concerns about the effect restrictive covenants can have on employees’ economic mobility, professional opportunities, and competition in the marketplace.

Since an estimated one in five Americans are subject to noncompete agreements,[1] understanding the current law and the limits of an employer’s ability to enforce a non-compete is essential before making career decisions.

What is a Non-Compete Agreement?

A non-compete agreement is a contractual provision that restricts an employee’s ability to work for a competing business, establish a competing business, or otherwise engage in competitive activity after the employment relationship ends. These provisions may appear in employment agreements, executive compensation arrangements, separation agreements, or other workplace documents. They can apply generally in any industry but are most commonly seen with employees in the sales, healthcare, and technology sectors and for management-level employees broadly.

A non-compete agreement may restrict an employee based on one or more factors, including:

• Time: How long the employee must refrain from competing after leaving the employer.
• Geography: The locations where the employee cannot work or compete.
• Scope of restricted activity: The types of jobs, services, or business covered by the restriction.

The specific language of an agreement is highly relevant. An agreement that prohibits employment with any business that is a “competitor,” for example, may raise different questions from one that narrowly defines the prohibited activities and the relevant competitive market.  Broad or ambiguous language can make it difficult for an employee to determine which opportunities are off-limits and may raise questions about whether the restriction is reasonable and enforceable.

Employees should also understand that a non-compete is not the same as a non-solicitation or confidentiality agreement.  A non-solicitation provision may restrict an employee from soliciting certain clients or co-workers after departure.  A confidentiality agreement generally restricts the use or disclosure of protected information.  These provisions raise distinct legal issues, and challenging a non-compete does not necessarily eliminate other contractual obligations.

Can an Unreasonable Non-Compete be Enforced?

An employer cannot simply establish enforceability by pointing to the employee’s signature. Under Ohio law, reasonableness and an employer’s legitimate business interests remain central to this analysis and proposed legislation may have significant impact on these covenants in the future.

Depending on the circumstances, an employee may have grounds to challenge the agreement, dispute the employer’s interpretation, or argue that the restriction should be narrowed.  However, employees should be cautious about assuming that an overbroad provision will be disregarded automatically.  Ohio courts may modify or “blue pencil” restrictions or find them unenforceable altogether depending on the specific language and other surrounding circumstances. 

Significant Changes May Be Coming

Ohio’s legal framework governing noncompete agreements is among the more employer-friendly in the country. By contrast, some states prohibit non-compete agreements for lower-wage workers, while others, such as California, have largely banned them altogether. Recent legislation introduced by Ohio lawmakers, however, could significantly alter the state’s approach to these agreements. 

Senate Bill 11, for example, was introduced last year and, as currently proposed, would prohibit employers from entering into non-compete agreements with current or prospective employees and prevent employers from enforcing existing agreements.[2] If enacted, the legislation would represent a substantial departure from existing Ohio law and significantly expand employees’ ability to pursue employment opportunities without the restrictions imposed by non-compete agreements.

Similarly, Senate Bill 301 focuses exclusively on the healthcare sector. As proposed, it would prohibit hospitals from enforcing non-compete agreements against physicians, physician assistants, and advanced practice registered nurses that extend beyond six months after the termination of employment or impose geographic restrictions exceeding fifteen miles from where the individual was employed.[3]

The Bottom Line for Ohio Employees

Non-compete agreements can have lasting consequences for an employee’s career, income, and professional independence.  Under current Ohio law, these agreements may be enforceable when they reasonably protect legitimate business interests, but an employer’s ability to restrict future employment is not unlimited.

A signed agreement is not necessarily an enforceable agreement in every respect.  Its language, the interests it protects, the hardship it creates, and the circumstances surrounding the employment relationship can all matter.  At the same time, employees should not assume that an overbroad restriction will be disregarded automatically or that pending legislation has already changed the law.

Before accepting a new position, starting a competing business, or leaving an employer, employees should carefully review their contractual obligations and consider obtaining legal advice.  Understanding the scope and enforceability of a restrictive covenant can help employees protect their rights, avoid unnecessary disputes, and make career decisions with greater confidence.

For more information, or to seek counsel from our Employment practice group, please reach out to request a consultation or call us at 216-696-1422.

_____
[1] https://www.ftc.gov/news-events/news/press-releases/2024/04/ftc-announces-rule-banning-noncompetes
[2] https://search-prod.lis.state.oh.us/api/v2/general_assembly_136/legislation/sb11/00_IN/pdf/
[3] https://search-prod.lis.state.oh.us/api/v2/general_assembly_136/legislation/sb301/00_IN/pdf/

This information is provided for general informational purposes only and should not be construed as legal advice. Readers should consult with qualified legal counsel regarding their specific circumstances before taking any action based on the information presented.

The post Non-Compete Agreements in Ohio: What Employees Should Know Before Changing Jobs appeared first on McCarthy Lebit - A Cleveland/Ohio Law Firm.

Ohio’s At-Will Employment Rules

Generally speaking, in Ohio, unless a written contract otherwise specifies, all employees are considered “at will” employees. This means an employee can be discharged or fired, and the terms and conditions of their employment such as pay, hours, and benefits, can prospectively change with or without cause. Of course, the at will nature of an employment relationship is subject to contractual, statutory and regulatory considerations.

For example, a written employment contract can alter the at-will nature of employment. Written employment contracts can include a written employment term, specify the reasons for discharge or reprimand (such as requiring for cause only dismissals), and may also include post-termination restrictive covenants such as non-compete agreements, non-solicitation agreements, and confidentiality and non-disclosure agreements. Written contracts are frequently, although not always, used for management level employees and those employees having access to confidential and proprietary information including trade secrets.   

Union Employees & Collective Bargaining Considerations

Collective bargaining agreements for union employees may also alter the nature of the at-will employment relationship. CBAs may also include provisions regulating reasons for discharge and reprimand.

The National Labor Relations Act (NLRA) regulates the interaction between employers and employees, including the right to unionize. The NLRA includes provisions affirming construction workers’ entitlement to engage in collective bargaining and establish or join labor unions, prohibiting employers from interfering with workers’ rights to discuss or coordinate activities related to labor, including online discussions; and, regulating unfair labor practices, such as discrimination or retaliation against unionized workers.

Wage, Overtime, & Recordkeeping Compliance

The Fair Labor Standards Act (“FLSA”) also imposes legal and regulatory requirements. The FLSA establishes standards for minimum wage, overtime pay, recordkeeping, and child labor. The FLSA includes provisions ensuring that construction workers are compensated at least the federal minimum wage for their hours of labor, mandating the provision of overtime pay for work exceeding 40 hours in a workweek and requiring employers to maintain precise records of employees’ worked hours, wages, and other pertinent documentation.

OSHA & Workplace Safety Compliance

Workplace safety considerations are of paramount importance in the construction industry. One of the most significant considerations is the Occupational Safety and Health Act (OSHA). OSHA requires construction firms to provide workplace safety and safeguard employees from potential hazards. Compliance with OSHA mandates include having a safe workplace free from recognized hazards, effective communication by employers of safety standards and requiring comprehensive training for their workforce, record keeping, routine inspections to verify compliance with safety regulations, and regulating non-compliance with OSHA standards with penalties and fines.

The Americans with Disabilities Act (“ADA”), the Family and Medical Leave Act (“FMLA”) and state workers compensation laws often overlap when an employee is injured on the construction job. Reasonable accommodation for disabilities is required by the ADA. Medical leave is required by the FMLA, and workers compensation laws apply to employees injured on the job. An employee with a work-related injury may be eligible for both FMLA and ADA accommodations. The ADA may require an employee to make reasonable accommodation, which might include light duty or modified schedules. The FMLA is separate and does not replace ADA obligations. Requiring FMLA use instead of providing reasonable accommodation may violate the ADA.

Best Practices for Employment Law Compliance

In complying with these statutory requirements, construction employers must balance job protection, medical treatment, and legal compliance, while employees recover from job related injuries. In addition, wrongful discharge claims may arise from an employer taking retaliatory action against an employee for exercising a right guaranteed by the ADA, FMLA or workers compensation laws. 

In sum, best practices require construction employers to maintain clear policies and procedures in place with respect to FLSA compliance, OSHA record keeping and training, and for ADA accommodation, FMLA leave, and reporting workers compensation claims.

For more information, or to seek counsel from our Employment practice group, please reach out to request a consultation or call us at 216-696-1422.

_____
This information is provided for general informational purposes only and should not be construed as legal advice. Readers should consult with qualified legal counsel regarding their specific circumstances before taking any action based on the information presented.

The post Legal Considerations for Construction Industry Employers appeared first on McCarthy Lebit - A Cleveland/Ohio Law Firm.

“Free Speech” Rights

Many of these discussions have understandably focused on political or social issues like “cancel culture” or “free speech” rights. From a legal perspective, however, these matters are mostly irrelevant because First Amendment “free speech” rights do not apply between private-sector employers and employees. Because the Constitution’s Bill of Rights restricts the government, not private employers, most employees’ First Amendment rights are not implicated by a termination or suspension. (Of course, if a government actor – like the Federal Communications Commission (FCC) – influences the decision, then constitutional rights may be implicated.)

But for a public-sector employee, the analysis is completely different because the employer is the government.  Therefore, the constitutional prohibition on punishing a person for speech applies.  Public sector employees can sue their employer for “First Amendment Retaliation” if they can show that (1) they were engaged in constitutionally protected speech; (2) they were subjected to an adverse employment action “that would deter a person of ordinary firmness from continuing to engage in that speech or conduct;” and (3) the protected speech was a substantial or motivating factor for the adverse employment action.  Whether an employee is engaged in “constitutionally protected speech” is determined by a court, evaluating whether the employee spoke as a citizen on a matter of “public concern” (meaning anything of political, social, or other concern to the community) and balancing the interests of the employee and the employer.

Protected Employee Speech

Meanwhile, all employers, private and public alike, are prohibited from retaliating against employees if those employees’ “speech” falls into one or more of the many categories of “protected activity” or “whistleblowing.”  Employment civil rights laws, for example, make it illegal to fire an employee for expressing concerns about illegal (like not paying overtime when it is due) or discriminatory (like sexual harassment) behavior in the workplace.  So while a private sector employer might be allowed to fire an employee for claiming that Charlie Kirk’s positions were “racist,” that same employer would be prohibited from firing an employee who complains that “Charlie Kirk has inspired people to be racist in this office.” 

Meanwhile, many laws encourage employees to report wrongdoing (itself a form of “speech”) and also protect employees from retaliation for doing so. The Defend Trade Secrets Act, for example, is a federal law establishing that an employee can disclose information to a government official or in a lawsuit – even if that information is a potential “trade secret” of the employer – provided the employee meets certain requirements for disclosure. 18 U.S.C. § 1833(b). Generally speaking, those requirements require the employee to take precautions against unnecessarily disclosing sensitive information beyond reporting to the government. To be clear, those requirements do not include recording employees on camcorders as the pitch of their voices continues to escalate:

Ohio also has its own whistleblower protection, which I’ve previously written about here.

Whether employees can be fired for something they said is a complicated issue that depends on the nature of the employment and the content of what was said. If you have a question about such rights, an experienced employment attorney would be an invaluable resource to help you understand your options and protect your interests.

For more information or to seek counsel from our Employment group, please reach out to request a consultation or call us at 216-696-1422.

_____
This information is provided for general informational purposes only and should not be construed as legal advice. Readers should consult with qualified legal counsel regarding their specific circumstances before taking any action based on the information presented.

The post Navigating the Office: Can I Be Fired for My Speech? appeared first on McCarthy Lebit - A Cleveland/Ohio Law Firm.

Now, before we dive into the specifics, let’s be very clear: there is no one-size-fits-all advice when it comes to evaluating a job offer. You’re unique, and therefore you have your own unique perspective and objectives. Perhaps your new job comes with a higher salary or offers notable opportunities for growth and development. Maybe it’s located near your children’s school. Or maybe it permits you to work in a niche field that aligns perfectly with your interests. Only you can decide how much weight to give each aspect of a job offer, and in some cases, it may be worth accepting a few drawbacks in exchange for the things you truly value. 

Nonetheless, it’s important to make your decisions with your eyes wide open, so here are a few questions you might want to be asking before accepting that job offer.

Will you be bound by an arbitration agreement?

Employers use a variety of tools to protect their interests and safeguard the investment that they are making in you as an employee of their company. One such tool is the arbitration agreement.

Without an arbitration agreement, if you get into a legal dispute with your employer, you can likely file a lawsuit in court. This is often the best venue for an employee: court proceedings are public; the judge generally permits an employee to conduct broad discovery regarding their claims (and requires the employer to provide the employee with all relevant documentation); and a jury typically decides whether the employee is entitled to relief.

If your employer binds you to a valid arbitration agreement, however, you won’t be able to just publicly file your claims in court. Instead, arbitration is a private process, where a private arbitrator (rather than a judge or a jury) makes a binding decision to resolve a legal dispute. Oftentimes, in arbitration agreements, employers also give themselves the right to determine where the arbitration will take place and to limit the discovery an employee is permitted to conduct.

So, before accepting your job offer, you might want to determine whether your employer is going to require you to sign an arbitration agreement or otherwise bind you to an arbitration provision.

Will you be bound by a non-compete agreement?

Employers also try to protect their interests by having their employees sign noncompete agreements. 

A noncompete agreement is a binding contract that prevents workers from seeking employment with a competitor or starting their own competitive business. Under preexisting Ohio law, noncompete agreements are lawful and enforceable so long as they are reasonable in scope, which typically means they are limited in terms of: (1) time (often expiring within one to two years after the employee’s employment); and (2) geography (often applying only where the employer actually conducts business).

Before accepting a job, it’s important that you understand whether you’ll have any post-employment restrictions.  Maybe you’re a materials scientist, and you’ve spent your whole career developing coatings. When your employment ends, will you be able to find another job in your field? Or is your potential employer seeking a non-compete agreement that is so broad as to cause you concern?

What happens to your intellectual property?

When an employee joins a company, it’s not unusual for the employer to require the employee to sign an Intellectual Property (“IP”) Assignment Agreement.  By signing this agreement, the employee agrees to transfer ownership of IP (like inventions and creative works) to his/her employer.  This kind of agreement makes a lot of sense: if an employee is creating work-product on behalf of his/her employer, the employer is going to want to make sure that it owns the work-product.

However, before you execute an IP Assignment Agreement, there are a whole host of questions you might want to consider.  Do you currently own any patents? Have you developed any inventions? How about any creative works? When you start your job, do you plan to continue developing your own IP on your own time? 

If the answer to any of these questions is “yes,” you’ll want to take a very careful look at any IP Assignment Agreement that your employer asks you to sign. You’ll want to determine whether it is sufficiently narrow—i.e., whether it only applies to IP you develop (1) during your employment and (2) with your employer’s equipment. 

How much bargaining power do you really have as a prospective employee?

As a practical matter, whenever you’re thinking about negotiating the terms of employment, there’s another question you should ask yourself (not your employer). How much bargaining power do you really have?

The answer to this question depends on your individual situation. For example, perhaps you enjoy your current job.  You’re open to alternative employment, but you don’t have to find a job right away. You’re not desperate. If that’s the case, maybe you’ll feel comfortable making a lot of requests in response to a new job offer. If the offer falls through, you’re still employed.

By contrast, you might be experiencing a period of unemployment, and you need to find a job right away. In that circumstance, you might want to be very measured when communicating with your prospective employer: you don’t want job-related requests to place your offer at risk.

And, of course, discussions related to job offers are not a one-way street. The employer will have its own set of considerations. The employer might be desperate to hire a candidate and might be willing to make several favorable changes to the job offer. In other circumstances, an employer may have interviewed many highly qualified applicants for a single position. That employer may not feel the need to revisit the terms of its original offer.

At McCarthy Lebit, we help employees evaluate their employment agreements and offer letters. Whether you have questions regarding a proposed employment agreement or if you need assistance negotiating specific terms, our employment team is equipped to assess your situation and offer appropriate assistance.

For more information or to seek counsel from our Employment group, please reach out to request a consultation or call us at 216-696-1422. McCarthy Lebit would like to thank law clerk Douglas (DJ) Carter for his work in assisting with the preparation of this legal blog post for The More Report.

_____
This information is provided for general informational purposes only and should not be construed as legal advice. Readers should consult with qualified legal counsel regarding their specific circumstances before taking any action based on the information presented.

The post Before You Accept: Questions to Ask About Your Job Offer appeared first on McCarthy Lebit - A Cleveland/Ohio Law Firm.