Unless you have been absent from the planet for the last month, you have heard of the proposed FTC rule that would effectively curtail the efficacy of non-competition provisions in most employment settings. Although a few states prohibit such agreements, Ohio is not one of them. Indeed, non-competes are generally viewed favorably by Ohio courts if the restrictions are reasonable and necessary to protect legitimate business interests. Believing such agreements to restrain competition, the FTC through its proposed rule, declares that it is an unfair method of competition for an employer to enter into a non-compete agreement with a worker and requires of any existing agreements be rescinded. Many Ohio employers legitimately use such agreements often in connection with a confidentiality provision. Enforcement, however, has always been subject to the predilections of any particular judge. Some like them. Some do not. A win for the employer is the issuance of an injunction prohibiting the offending conduct. A win for the employee is to prevent one. Because enforcement litigation is always “hurry up” it is generally quite expensive for both sides. I have handled hundreds of such disputes over the years. Some trials were short – a half day, others long –several weeks. As with most cases they frequently settle through some sort of compromise limiting the perceived offending conduct. The ultimate outcome often tuns not on the language of the agreement but on how egregious the facts are. I once had a defendant sheepishly admit on cross examination that those innocent entries on his calendar and expense reports were actually dummied up to conceal the real customer he had called upon. You can imagine how that turned out. Trial attorneys know a good story and a likable witness go a long way in obtaining justice.
I was intrigued by a recent article in the Wall Street Journal by former Labor Secretary Eugene Scalia explaining how the road to the FTC rule becoming law will be both long and torturous. I see the US Chamber of Commerce is now weighing in. Others are offering better ways to contractually protect proprietary information. I have been trying these cases for over 50 years. My bet is that non-compete enforcement litigation will be going on long after I leave the scene. Keith Savidge
Mr. Savidge, a business litigator at SSEG, can be reached at email@example.com.