Drafting Enforceable Non-Compete Agreements: A Primer For Chiropractors

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With the increased frequency with which workers move from job-to-job and the substantial downturn in the economy over the last couple years, more and more businesses have turned to non-compete agreements as a tool to protect their valuable assets and investments. Businesses associated with the chiropractic profession have not been immune from this continuing trend. Restrictive covenants, such as non-compete agreements, allow employers to protect precious trade secrets and confidential information (including customer lists and databases, cost and pricing information, developed customer relationships and goodwill) should an employee leave the company’s employ. Restrictive covenants are also used to prohibit valuable employees from accepting employment opportunities with competitors for a reasonable period of time after the employee leaves his or her employment.

If a business is considering having its employees sign a non-compete agreement, it should be aware that courts universally disfavor agreements which restrict an individual’s right to make a living. Such agreements arguably run contrary to the American ethos that a person should not be prevented from making the most of his or her opportunities. However, most courts, including Ohio courts, acknowledge a person’s right to bargain away certain freedoms, including the freedom to make a living, and will enforce such agreements to the extent they are reasonable. Under Ohio law, a non-compete agreement is considered reasonable if: (1) it goes no further than necessary to protect the legitimate competitive interests of the employer; (2) it does not impose undue hardships on the employee; and (3) it is not injurious to the public. Most litigation concerning the reasonableness of a non-compete agreement centers on whether the agreement is reasonable in temporal and geographic scope.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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