Employee's leave all the time – there is nothing wrong with an employee moving on. However, when your employee leaves, they take their knowledge of your business practices, information, and assets with them. This can pose a risk to your business and the assets you have worked so hard to build. Whether the former employee is starting their own business or working for a competitor, there are actions that you can take to protect yourself starting on that employee's first day with you.
Ohio law favors restrictive covenants; restrictive covenants include confidentiality agreements, non-compete clauses, and non-solicitation clauses. While you cannot prevent your former employee from working everywhere or for the rest of their life, you can ask employees to agree to some reasonable restrictions on how and where they can work after they leave your employ.
So what are these "restrictive" covenants? Restrictive covenants can be incorporated into an employment agreement or stand on their own.
While there is no one size fits all covenant that will be found to be reasonable 100% of the time, there are several factors that courts will weigh when considering whether a clause will be enforceable. These factors include:
Basically, when determining if a restrictive covenant is enforceable, a court will evaluate whether the clause is no more restrictive than necessary to protect your business. As such, thought should be given to these clauses so that they are tailored to your business and protecting those assets unique to it. Some questions to ask yourself include:
With these questions in mind, it's important to take a few other precautions in the event you ever need to enforce a restrictive covenant.
As stated above, employees leave all the time. Be prepared for their departure so that you can rest assured that your company is protected when that time comes.