Relying on the Ohio Sixth District Court of Appeals, Douville argued that the trial court erred because the integration clause struck down the non-compete obligation, the injunction was wrongly issued, and the non-compete obligation was inappropriate and unenforceable. However, the court did not accept any of the points of error. First, if you look at the clear wording of the termination agreement, it was clear that the agreement only replaced the previous oral agreements and not the written non-compete obligation. On the other hand, the Tribunal was not persuaded by Douvile`s argument that Try Hours had waived enforcement against it because it had failed to enforce a non-compete obligation against an employee. This recourse to a waiver was not reasonable because there was no evidence that a one-time exemption from the application of another agreement led Douville to believe that Try Hours had waived the application of the non-compete law against it. Douville continued to work for Premium Freight Management (“PFM”), a competitor, assuming that the integration clause of its termination agreement lifts the non-compete obligation. When Try Hours learned that Douville was employed by PFM, it filed a lawsuit against PFM and Douville. Try Hours filed an application and the Court of First Instance subsequently granted an application for an injunction prohibiting Douville from breaching the non-compete obligation. The court granted the claim on the grounds that the integration clause did not remove the non-compete obligation and that the non-compete obligation was appropriate and enforceable. What should employers take away from this decision? Since provisions requiring payment during non-compete obligations can impose significant costs on the employer, employers must realistically assess what they are willing to pay.
One way to control these costs is to explicitly state in the agreement that the employer has the right to shorten non-compete obligations or gardening leave periods, and that the employer also has the right to proportionately reduce or eliminate a related payment obligation. The absence of such explicit contractual approval in this case sounded the death knell for Getco. “Sufficient consideration” is a legal term that means that you, as an employee, must benefit from the signing of the agreement. This may include obtaining the job (if you signed the non-compete clause as part of the employment contract) or maintaining the job for at least two years (if you only signed it after you have already been employed). Some non-compete obligations contain explicit clauses that allow an employer to do just that – shorten the non-compete obligation and thus avoid contractual non-compete obligations – but the Court`s opinion does not mention such a clause here. For this reason, the legal and performance department of a company that signs a non-competition clause must cooperate in the supervision of the former employee. For the same reason, if a former employee is not sure that his actions would violate the agreement, he should consult directly with the company and, if necessary, ensure a written agreement that his actions are compliant. Try Hours, Inc., 2013 WL 139584, at *2. The agreement defined competition as “any undertaking providing transport services for rental purposes on an accelerated basis, as that term is generally understood in the transport sector”.
Id. at *2. The agreement also prohibited Douville from recruiting Try Hours employees and customers. In the end, Try Hours decided to terminate Douville`s employment on the grounds that he did not fit the organization. After the termination, Douville entered into a termination agreement which, among other things, granted him an additional payment for a certain period of time and health benefits. The termination agreement also contained an integration clause that rendered null and void all previous oral agreements between the parties on the subject matter of the termination agreement. However, the termination agreement did not mention the non-compete obligation. But here, the employer had apparently taken some considerations – and just over a week after the employee was fired, the employer informed the employee that it was waiving the six-month non-compete clause, allowing him to work anywhere, and therefore not paying him a portion of the $1 million promised. Whether the waiver is in the form of an addendum or a stand-alone document, it must contain very specific language regarding the terms of the original non-compete obligation.
Where the non-compete obligation mentions a certain duration or geographical scope, the derogation should also specify those conditions. The fuzzy language in any contract is an invitation to different interpretations, disputes and disputes. The waiver must be attested and notarized, the initials of both parties on its pages and a person responsible for monitoring and executing employment contracts for the employer must sign it. A non-compete obligation must be the best and narrowest way to protect the interests of the employer. In general, there are two categories of legitimate business interests that may be protected that support the maintenance of a non-compete obligation: In summary, the Court concluded that the duration and scope of the non-compete obligation was reasonable since it was limited to one year and applied only domestically in the expedited shipping industry. Nothing prevented Douville from finding another job in non-accelerated shipping companies. Since Douville had only signed an agreement cancelling the previous oral agreements, there was nothing to prevent the performance of the written non-competition obligation. Employees who wish to avoid a non-compete obligation upon termination of an employment relationship should ensure that their former employer expressly exempts them from the agreement. This was the case in Try Hours, Inc. v.
Douville, 2013 WL 139584 (Ohio App. 2013). In Try Hours, Inc., the Sixth Appeals District of the Ohio Court of Appeals, noted that an integration clause in a termination agreement only excluded previous oral agreements and did not replace a valid and enforceable obligation not to compete. If you`re feeling trapped by an impending non-compete clause, G&G Law can help! Contact us today to explore options for your future. First, the employer argued that it was free to waive the non-compete obligation itself in favour of the employer and not to make the related payment of $1 million. But the court did say, “Whoa, not so quickly,” noting that the non-compete clause also included a clause stating that there can be no waiver of a contractual provision unless it is “signed by the party against whom the waiver or amendment is applied.” In this case, the waiver was enforced against the employee, but the employee did not sign such a written waiver and, therefore, the alleged waiver was ineffective. In addition, the Court noted that there was no language in the cartel suggesting that effective performance of the non-compete obligation was a precondition for the payment of $1 million. The scope of the non-compete obligation must be limited. This is often the geographical area of the restriction. An appropriate restriction could prohibit an employee from competing within a few miles, depending on the region and population density. An inappropriate (and therefore unenforceable) clause could prevent the worker from competing across the state. .