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Ely
Ely, Lawyer
Category: US Law
Satisfied Customers: 101324
Experience:  Counselor at Law. Private practice with focus on family, criminal, PI, consumer protection, and business consultation.
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Hi, I signed a non-compete clause when I agreed my annual bonus,

Customer Question

Hi, I signed a non-compete clause when I agreed my annual bonus, it's not part of my contract of employment. The annual bonus was not triggered so was not paid. I have now been made reduntant. Is the non-compete clause still valid? I'm not sure if it's relevant but the contract is governed by the US State of Ohio.
Submitted: 2 years ago.
Category: US Law
Expert:  Ely replied 2 years ago.
Hello. My name is ***** ***** welcome to JustAnswer. Please note: (1) this is general information only, not legal advice, and, (2) there may be a slight delay between your follow ups and my reply.
I am sorry for your situation.
Unless the non-compete clause was contingent upon the bonus being paid, I am afraid it is still valid even if the bonus was not paid.
However, note that non-compete clauses may not be enforceable depending on nuance. See here, since the contract is governed by Ohio law.
Good luck.
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I hope this helps and clarifies. Gentle Reminder: Use the reply button to keep chatting, or please rate and submit your rating when we are finished. You may always ask follow ups at no charge after rating. Kindly rate my answer as one of the top three faces/stars and then submit, as this is how I get credit for my time with you. Rating my answer the bottom two faces/stars does not give me credit and reflects poorly on me, even if my answer is correct. I work very hard to formulate an informative and honest answer for you; please reciprocate my good faith.
Ely, Lawyer
Category: US Law
Satisfied Customers: 101324
Experience: Counselor at Law. Private practice with focus on family, criminal, PI, consumer protection, and business consultation.
Ely and other US Law Specialists are ready to help you
Customer: replied 2 years ago.

Thank you, ***** ***** very helpful. I understood that under UK law there needs to be 'Consideration' to make the clause valid and the lack of payment of the bonus would imply that there was no Consideration so this interpretation is interesting.

The clause states "As a participant you will typically receive confidential information and will have customer contact. Accordingly for a period of twelve months following the date of the end of your employment relationship with the Employer, you shall not, directly or indirectly, as an employee, independent contactor or otherwise, do any of the following:

1. attempt to solicit, solicit, attempt to divert, or divert customer business from the Employer.

2. affiliate with (ie. be employed by, contract with or otherwise serve) a competitor of the Employer in any community of activities which you served or supported while employed by the Employer including but not limited to providing the competitor with print, online, in person media, ecommerce or other assistance.

This business protection shall survive the period of the bonus program, is fully assignable by the Employer and is governed by the laws of the State of Ohio."

Given that the Employer has made my postion redundant, does this seem reasonable? I've lost my income, had no bonus and am now unable to find employment in the sectors where my experience is most valuable for twelve months.

Many thanks

Brian

Expert:  Ely replied 2 years ago.
My apologies for the wait.
1) Consideration is a doctrine that applies in US contract law as well. Typically, the non-compete is part of the broader contract which contains consideration which may be your employment, or, simply the words "for lawful consideration" or some variation thereof.
2) Unfortunately, what is and what is not "reasonable" is up to the Court to decide. There are two ways to go about doing this. One is to violate the non-compete and risk a suit, and argue the affirmative defense of the non-compete being unreasonable. This is risky. The second version is to take a more proactive approach and file for declaratory judgment as Plaintiff one's self, asking the Court to determine whether or not the non-compete is reasonable or not.

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