Is a Non-Compete Agreement a Proposal to Renegotiate Terms of An At-Will Employment Relationship ?
In Lake Land Emp. Group of Akron, LLC v. Columber, 101 Ohio St.3d 242, 2004 Ohio 786, at P17, 804 N.E.2d 27, the employee was hired by his employer in 1988 as an at-will employee.
In 1991, the employee signed a non-compete agreement, but was not given an increase of salary, benefits, or other remunerations as consideration for entering into the agreement.
The trial court refused to enforce the agreement, concluding that there had been no consideration given to the employee in exchange for his agreement not to compete with his employer.
The Ohio Supreme Court disagreed. It concluded that the presentation of a noncompetition agreement by an employer to an at-will employee is, in effect, a proposal to renegotiate the terms of the parties' at-will employment. Id. at P19.
If the employee does not agree to the terms proposed by the employer, then he may leave his employment or his employer could terminate his employment without consequence. Id. at P18.
Accordingly, the promise of continued employment is sufficient consideration to support the enforcement of a non-compete agreement entered into by two parties to an at-will employment relationship. Id. at syllabus.