Court Opinion

ID: 3726272
Source: CourtListenerOpinion
Date Created: 2016-07-06 06:55:40.279405+00
Date Added: 2024-06-11T07:45:41.473736
License: Public Domain

If this non-compete agreement be not valid, no non-compete agreement would ever be enforceable.  The foregoing is a general comment, because an agreement such as this will not always be valid — the facts of each individual case are paramount.  But the trial court's ruling would negate almost all non-competition agreements.  If Ohio is to go the way of California, where no covenants are legal except in a sale of a business, that would be a legislative decision.  But, under present law, Ohio enforces non-compete agreements to the extent reasonably necessary to protect the employer's legitimate interests.
Though I believe that continued employment alone is sufficient consideration to support a covenant not to compete, here Stoneham received stock options that he exercised for a profit of $684,000. Mr. Stoneham made the deal.  He should abide by it, unless it is ultimately found to be unenforceable, a decision we cannot make today because of the unfortunate procedural posture of this case.
The trial court found that PG had not made out a case — a ruling we reverse as being against the manifest weight of the evidence and erroneous as a matter of law.  That is, the judge blew the whistle partway into the second half, ruling that PG had failed to score in the first half.  Stoneham must be given the opportunity to present the rest of his defense, after which the trial court will then make a decision on enforceability.  This step is necessary because there may be some evidence in this case that could negate what PG has initially established.  The trial judge, in evaluating the covenant after the close of all the evidence, should be guided by our decision today.
The lead opinion adopts the inevitable-disclosure rule.  That rule is in conformity with common sense.  It is just such inevitable use that the non-compete agreement here targets.  An employer should not have to demonstrate any actual or overtly threatened harm — the fact that an ex-employee, possessed of a substantial amount of confidential information, is now with a competitor in a position where that knowledge would produce a competitive advantage should be sufficient to require an injunction.  Also, though I agree that the abuse-of-discretion standard applies to a trial court's decision whether to grant an injunction, I believe that, in a case such as this, if an employer proves it is entitled to an injunction, it would be unreasonable, and thus an abuse of the court's discretion, to refuse injunctive relief. *Page 278