non-solicitation enforcement

Lack of consideration is no longer a defense

The Ohio Supreme Court held within the last two years that an employer's continued employment of an at-will employee would not amount to a failure to provide consideration (i.e., value) necessary to form an agreement. In other words, the non-solicitation agreement is not invalid simply because it was signed well into your employment.

The fact that the employer instructed you to back date the agreement suggests some level of misrepresentation. However, unless you were essentially duped into signing something in the belief that it was something else, such misrepresentation will probably not help you avoid the non-compete.

The fact that the non-compete goes on for three years, however, may cause it to be too broad (i.e., too long in duration). A court could make the duration shorter. However, the fact that May, 2008 is not far off at this point makes the value of a court challenge questionable.

If you want to explore other ways to work around the non-competition restrictions, I have a great deal of experience at that. Please call Jenny at 330.665.5445, ext. 0 if you would like to schedule a consultation. We charge $200.

posted by Neil Klingshirn  |  Sep 26, 2007 12:23 PM [EST]

Continued Employment Probably Is Adequate Compensation for Non-Solicitation Agreement

The legal questions regarding whether a non solicitation agreement is enforceable without any additional compensation being offered besides continued employment will be very much like the legal questions regrading whether a non-compete agreement is enforceable without additional compensation being provided besides continued employment. These are questions that are answered by courts that have examined the particular facts and applied the law. When the Ohio Supreme Court issues a decision, the decision will control throughout the State. Although the Ohio Supreme Court has not addressed your question specifically, the Court has addressed the question about non-compete agreemnents.

In Lake Land Emp. Group of Akron, LLC v. Columber, a case decided in 2004, the Court held that continued employment is adequate consideration to support a non-compete agreement offered to an at-will employee. While the decision is not necessarily binding on your circumstance, it could be at least, highly persuasive. Following that case, the same would be said in response to your question.

Despite the fact that continued employment alone is likely to be sufficient consideration to support a non-solicitation agreement offered to an at-will employee, that does not end the inquiry about whether the agreement in your case is enforceable. You were correct to seek legal counsel regarding your concern. The issues you face could be significant, and generalized information such as this is no substitute for sound legal counsel.

Non-solicitation agreements like non-compete agreements are a specialized form of contract known as restrictive covenants. The decisions about whether restrictive covenants may be enforced are complicated questions of law and fact. So your legal counsel should have detailed knowledge of the law and experience with applying different facts to the law. In other words, competent legal counsel should be able to advise you about the state of the law, the importance of your particular facts, the legal avenues available to address your concerns, and the business options you have to deal with your situation.

posted by Gregory Gordillo  |  Sep 26, 2007 11:52 AM [EST]