Tuesday, August 31, 2010

Do you know? Challenging non-competition agreements

While my practice is heavily slanted towards the representation of management in employment disputes, from time to time I represent employees. Usually, it’s in an advisory role with non-compete agreements, when someone leaves one position for another.

Employees faced with a non-compete when leaving a job to work for a competitor or quasi-competitor have three choices:

  1. Approach the old employer—either as part of severance negotiations or otherwise—and attempt to negotiate or buy your way out of the non-compete.
  2. Work for the competitor and wait to get sued.
  3. Preemptively sue your old employer seeking a declaration that the non-compete is invalid.

In all likelihood, if you ignore option number 1, or negotiations fail, you, and maybe your new employer, will get sued. The latter option, though, has some great upside for employees with specious non-competes. It lets you control the timing and venue of the lawsuit. It also lets you play offense instead of defense in trying to void or modify an overly broad agreement. For a good example of where this strategy worked well, see Jacono v. Invacare Corp. The downside, of course, is the expense. Something to consider if you are faced with a new job and a non-compete of dubious enforceability.

Presented by Kohrman Jackson & Krantz, with offices in Cleveland and Columbus. For more information, contact Jon Hyman, a partner in our Labor & Employment group, at (216) 736-7226 or jth@kjk.com.