Answering 7 Questions About Non-Compete and Non-Disclosure Agreements

Non-compete and non-disclosure agreements are valuable business tools, but it’s important to understand the distinction between the two. Here are seven frequently asked questions that clarify how these agreements work and why they’re important.

Non-disclosure agreements (NDAs) and non-compete agreements, also called a non-competition agreement or covenant not to compete, have distinct purposes. Both documents, however, are restrictive covenants that limit what an employee can say or do, and (often) where they can and cannot work. These documents are designed to protect proprietary information and the company itself if an employee were to leave the company to work for a competitor.

Lately, NDAs and non-competes have been getting a bit of a bad reputation. A recent story in the New York Times argued these documents can “take a person’s greatest professional assets—years of hard work and earned skills—and turn them into a liability” for employees. The piece claims employers have come to assert ownership over their employees’ work experience as well as their work, and that noncompete agreements in particular can keep employees “stuck” at a company, because the employees fear they won’t be able to get another job.

The truth is, non-compete agreements and non-disclosure agreements are valuable tools for business owners—not because they force people to stay with you, but because they offer legal protection over the work that makes your company different and special. Poorly drafted or unreasonable agreements probably will be deemed unenforceable, but a well-crafted NDA or non-compete should not be. These agreements will respect your right to keep proprietary information protected, and respect an employee’s decision to take his or her career in a different direction.


Common NDA and non-compete agreement questions

There are many reasons you might decide to require your employees to sign either an NDA or a non-compete. It is important to understand the differences between these two documents and how they are enforced. Listed below are seven common questions people ask about these agreements.


Q: What is the purpose of a non-compete agreement?


A: A non-compete is an agreement in which one party agrees not to compete against the other party. In an employer-employee context, this refers to an employee being the recipient of the prohibition on competition and an employer being the protected party, who is using the non-compete agreement to protect her specific business within a specified geographic area for a specified length of time. A non-compete typically restricts an employee from working for a competitor for the length of time and within the geographic area mentioned in the contract. The language of a non-compete is usually contained within the employment contract.


Q: What is the purpose of a non-disclosure agreement?

A: A non-disclosure agreement (also referred to as a confidentiality agreement) between an employer and an employee prohibits the employee from disclosing any of the employer’s proprietary information, business processes, intellectual property, or knowledge assets.


Q: Are non-competes and NDAs enforceable in Ohio?


A: NDAs are generally enforceable in Ohio, provided the confidential information to be protected is properly defined and constitutes the employer’s proprietary information. Non-competition agreements are enforceable in Ohio, provided they are “reasonable.” The Ohio Supreme Court has held that non-competition agreements are reasonable (and thus, enforceable) in Ohio, if the employer can show that:

1) the restrictions are no greater than necessary to protect the employer’s legitimate business interests; 

2) they do not impose an undue hardship on the employee; and 

3) the restrictions would not injure the public.  

There are several important factors the Ohio courts consider in deciding whether to enforce non-competes, including, but not limited to, the geographic area covered by the restriction, the duration of the of the non-compete, whether the employee possesses confidential information or trade secrets of the employer and the likelihood the employee can find other employment if the non-competition agreement is enforced.


Q: Is it legal for an employer to require an existing employee to sign a non-compete and/or a NDA to keep their job?


A: Employers generally may make signing a non-compete or a NDA a condition of employment or of continued employment. There might be exceptions for employees who are already covered by individual employment contracts or union agreements.


Q: What is a reasonable length of time and a reasonable geographic scope for a non-compete agreement?


A: Courts often consider factors such as geographic scope, length of time and the nature of the duties restricted in relationship to one another. A broad geographic scope might be enforced if the duration of the non-compete is as short as a month, but a broad geographic scope coupled with a long period of time is not likely to be enforced. A court generally will not enforce a non-compete that prevents an employee from working in a region where the employer is not doing business.


Q: Is a non-compete or NDA valid after I fire an employee?


A: It depends on the document. If the document addresses what happens after an employee is fired, then it might be valid.


Q:  What are non-solicitation agreements?


A: Another instrument that can be useful to employers who are looking to protect their business’ intellectual property is a non-solicitation agreement. Non-solicitation agreements restrict an employee from soliciting the employees or customers of a business. For example, a super-star sales manager who leaves your company would not be able to solicit other team members to leave with them, nor would they be able to poach your customers or clients if the departing employee signed a non-solicitation agreement.


Why these documents are important

A story in The Balance highlights the biggest challenge with non-competition, non-disclosure and non-solicitation agreements: enforcement. Once the trade secret has been divulged, the employee has been solicited to leave, or a former employee’s competition has ruined a business, it takes a lengthy, costly legal process to recover damages and put that proverbial genie back into the bottle. 

The Columbus CEO discusses the vital importance of enforcement, quoting a study that revealed less than half of the organizations in the study said their organizations take action when workers take sensitive information. When an employee leaves your organization and starts a new job that potentially violates the agreements they have signed, you may choose to send a “cease-and-desist” demand to the former employee’s new employer informing them of your former employee’s non-competition agreement. 

The intention of this blog post is to give you a rough outline of NDAs and non-competition agreements. Whether it is appropriate or necessary for you to use one or both agreements, and what details they should include, should be a topic of conversation with your business attorney.

For more information on this topic, contact Alex Gertsburg at 440-571-7775 or ag@gertsburglaw.com. Get more legal tips for your business on The Gertsburg Law Firm blog, with new articles every week.

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  • Next up: Answering 8 Frequently Asked Questions About COSE’s MEWA
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  • Answering 8 Frequently Asked Questions About COSE’s MEWA

    To provide you with a more competitive set of healthcare coverage solutions for your company and your employees, COSE has partnered with Medical Mutual to offer the COSE Health and Wellness Trust, also known as the COSE MEWA. This is a multiple employer welfare arrangement (MEWA) designed as a self-funded benefit option for businesses with 50 or fewer employees. Business owners with no employees are eligible to apply.

    Listed below are eight of the most frequent questions we receive from members about how the COSE MEWA works and how it may be a good benefit option for small businesses. Looking for additional insight? Visit our COSE MEWA information page.

    Question 1: What is the COSE Health and Wellness Trust?

    Answer: The COSE Health and Wellness Trust is a new way to cover your employees’ health benefits with some great financial benefits for you. It’s a self-funded, Multiple Employer Health Welfare Arrangement (MEWA) health plan for COSE members and designed with small business needs in mind. The COSE MEWA was exclusively developed by COSE and the Greater Cleveland Partnership to help its small business members and their employees with the increasing cost of healthcare benefits.

    Question 2: Who can apply?

    Answer: You must be a member of the Greater Cleveland Partnership’s Council of Smaller Enterprises (COSE) to apply for coverage in the COSE MEWA, and your business must have 50 or fewer employees. Business owners and partnerships with no employees are also eligible to apply. Please contact your broker or our direct sales team at (888)310-6262 or COSEbenefits@medmutual.com.

    Question 3: What are the benefits of using the COSE MEWA for my group’s health coverage?

    Answer: The COSE MEWA was designed to manage your healthcare benefits cost, and provide benefit plans that may be a better fit for small business owners and their employees. Because the COSE MEWA is a self-funded plan, it has many benefits, including:

    • The COSE MEWA offers 18 different plan options with varying deductibles and coinsurance designed exclusively for the COSE MEWA, and because MEWAs are not subject to some of the Affordable Care Act’s (ACA) mandated benefits and taxes, it helps to keep costs lower.

    • The cost of your benefits better reflect the unique health of you and your employees, recognizing that a healthier team should create a better benefits cost outcome.

    • All COSE MEWA benefit options are tied to the same Medical Mutual network of doctors and hospitals that COSE members have accessed for years.

    • And, because we have arranged to have Medical Mutual administer these benefits, your employees will still have access to Medical Mutual’s Customer Care team.

    • In addition, we know that the security of your data and information is important. So, as an additional benefit, the COSE MEWA also offers identity theft resolution services coverage and remediation services at no additional cost.

    Question 4: What are the advantages of a self-funded plan?

    Answer: There are several advantages to small business owners with a self-funded option:

    • The COSE MEWA offers rate stability, the flexibility of benefit options and recognition of preferred health status.

    • The COSE MEWA may be less expensive for your group than similar ACA plans because it considers criteria unique to your employees such as medical history.

    • Your disclosed pre-existing conditions will still be covered.

    Question 5: How will my group funding rates be determined?

    Answer: Unlike Community rated ACA rates that are solely determined by age, location, family size and smoker status, your group rates will be based on additional factors, such as medical history and gender. The expanded criteria of the COSE MEWA for pricing your benefits allow us to tailor the costs to the unique characteristics of your group, recognizing the preferred health status that you may have.

    Question 6: How is the COSE MEWA regulated and protected?

    Answer: The COSE MEWA is regulated by the Ohio Department of Insurance (ODI). These state regulators monitor the COSE MEWA to ensure appropriate surplus is available to cover unforeseen risk and protect its solvency. The COSE MEWA also maintains stop-loss insurance coverage to provide additional protection to plan participants. You can feel confident about the stability of the COSE MEWA as it is closely monitored by the Internal Revenue Service, the Department of Labor and the ODI.

    Question 7: Do these plans comply with the ACA?

    Answer: These plans comply with all ACA mandates applicable to self-funded plans as well as certain state requirements for MEWAs. The COSE MEWA covers ACA-compliant Essential Health Benefits with the exception of pediatric dental coverage.

    Question 8: Who can I contact for more information about plans or to get a quote?

    Answer: For more information or to get a quote, please contact your broker or contact the Medical Mutual COSE Benefits team at (440) 878-5930 or call (888)310-6262. You can also email questions to COSEbenefits@medmutual.com.

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  • Next up: 13 Ways to Set Up a Winning Internship Program
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  • 13 Ways to Set Up a Winning Internship Program

    Throughout the year, we will be recapping some of the sessions that took place during the 2018 Cleveland Internship Summit. Today’s article focuses on the best practices surrounding the establishment of an internship program.

    If you’re going to put together a top-notch internship program, what better place to start than by taking inspiration from organizations that have already taken that step? That’s exactly what attendees of the “Ask the Pros” session held during the 2018 Cleveland Internship Summit had the opportunity to do.

    Taking part in the panel discussion were:

    • MacKenzie Hawes, talent acquisition and employment programs associate with the Northeast Ohio Regional Sewer District;
    • Kelly Diamond, recruiting program manager at Hyland; and
    • Jennifer Cowles, leadership and executive programs leader at KeyBank.

    Read on below for the 13 takeaways these panelists provided during the panel discussion. And scroll down to the bottom of the article to listen to a full recap of the session.

    How do you identify potential internship candidates?

    1: Focus on the degree programs that most closely match what you’re looking for.

    2: For summer internship programs, it’s ideal to begin your intern search in the fall and to have candidates identified and hired by winter break.

    3: Set up partnerships with schools in the region and have a presence at program-specific recruiting fairs (such as one held just for engineering students if that’s the kind of skill you’re seeking.)

    4: Try setting up a table at a college quad or work with professors to give a quick pitch for interns at a classroom setting.

    What should the interview process look like?

    5: Conduct a phone screen to ensure the candidate has the basic requirements for the job. If the basic requirements are met, move on to manager interviews and an online assessment if needed.

    6: Consider also sending a business case in advance, if applicable, for a candidate to evaluate.

    7: Think about holding an “Intern Day” where you bring in all of your candidates for a full day of in-person interviews.

    8: Don’t forget to conduct a background check.

    How do you prepare the intern’s supervisor?

    9: About a month before the internship is to start, meet with the manager to determine the intern's project timelines.

    10:  Review expectations for the intern with the intern’s supervisor.

    11: Encourage the manager to select mentors to also work with the interns.

    What’s the best way to include career development into the program?

    12: Provide opportunities for the interns to learn about other departments or lines of business within the company.

    13: Keep the interns engaged during the program by hosting functions such as lunch-and-learns that can focus on topics including resume building, interviewing tips and how to leverage LinkedIn during a job search. 

    Learn more about the ins and outs of internship programs by checking out GCP Internship Central. And don't forget to register for the 2019 Cleveland Internship Summit on Feb. 21, a day full of panels and conversations designed to help you build and optimize your company's internship program. Click here to learn more.

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  • Next up: At-Home Health and Wellness Tips While Social Distancing
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  • At-Home Health and Wellness Tips While Social Distancing

     

    Due to the coronavirus disease also known as COVID-19, citizens across the country have been forced to adapt to a new way of living – staying at home. Though these safety precautions are necessary to help flatten the curve of the virus, isolation at home can take a heavy toll on our mental and physical health. That’s why it’s extra important to find new ways to stay on top of your health and wellness routines during this time. 

    Take a look at different ways you can take care of yourself while social distancing in your home:

    1. Figure out your new “normal”
    Most likely, this stay-at-home lifestyle is disrupting your typical routine. Create a new routine that incorporates some normalcy to promote productivity and wellness. If you typically wake up, shower, eat breakfast and get dressed for the day, continue to do so each morning. It will help get your day started better than lounging in your pajamas until noon. Be sure to map out time for meals, workouts, outdoor activity and mental exercises as well. By sticking to a routine each day, you can stay on track with work, household chores and self-care. 

    2. Continue (or start!) your fitness journey 
    Staying active is essential to your overall health, but even more so when you need to stay home all day and spend the majority of your time sitting. With more time on your hands due to the “shelter in place” mandate in Ohio, it’s the perfect time to develop a regular workout routine. If you aren’t sure how to get started or are accustomed to working out in a class environment, many trainers and gyms are offering free virtual workouts during the COVID-19 crisis. Research the type of workout you are interested in and learn at-home modifications. Another great option is to go for a walk or run outside to get fresh air and avoid cabin fever.

    3. Prioritize a nutritious diet
    Being home all throughout the day can lead to some unhealthy (and frequent) snacking habits. Try to stick to traditional meal times and stock up on healthy food items like fruits and vegetables that can be frozen or canned. You can prioritize a balanced diet by trying new healthy recipes to fuel your body and immune system. By experimenting with different foods and recipes, you can make mealtime exciting at a time when restaurants and bars are closed. Some restaurants are still serving food through carry-out or delivery methods, so be sure to also research restaurants in your area and support local businesses. 

    4. Fuel your brain 
    With the stress and anxiety that is caused by isolation and the uncertainties of a pandemic, it’s important that you protect your mental health by practicing mindfulness. This can involve meditation and breathing exercises that allow you to process and cope with what you’re feeling during this unprecedented time. Another way to promote good mental health is to keep your mind sharp. Activities like puzzles, word searches, reading and more are great ways to keep your mind active instead of mindlessly binge-watching TV or movies.

    5. Stay in touch virtually 
    Although the country is practicing social distancing at the moment, that doesn’t mean you are alone. Plan out phone calls and virtual chats with friends and family and offer words of support. You could also eat meals together virtually or play a game over video chat to retain some sense of normalcy. Human interactions are essential to one’s mental health, so try setting a goal to talk to at least one other person outside your home each day. 

    For more information and updates on COVID-19, please visit CDC.gov/coronavirus. If you are a COSE MEWA member through Medical Mutual, please visit MedMutual.com/COVID-19 for member information regarding the virus. To learn more about the wellness benefits offered through a COSE MEWA health plan, please contact your broker or your Medical Mutual Sales representative.  

     
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  • Next up: August is National Eye Exam Month – Read this to see why!
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  • August is National Eye Exam Month – Read this to see why!

    In celebration of National Eye Exam month, here are three compelling reasons you should book your annual eye exam today.

    Have you scheduled your annual eye exam? You might be surprised to know that there is more to an eye exam than just checking visual clarity or getting an updated prescription. Caring for your eyes should always be a part of your regular healthcare routine – even if you don’t wear glasses or contacts or have any previous history of eye problems. Although you might not have needed vision correction in the past, your eyes can change as you age. Getting regular eye exams is the best way to make sure you are detecting problems early, have the right prescription lenses and to make sure your overall vision health is maintained to help prevent future vision loss. Here are three important reasons why you should visit your eye doctor every year.

    1. Detect Early Signs of Chronic Diseases

    Your optometrist can tell a lot about your overall wellness by examining your eyes, the only place on your body where your circulatory system is visible. Optometrists have shocking stories about how annual eye exams helped them detect early signs of serious health conditions like diabetes and hypertension, even in seemingly healthy patients. Getting your eyes checked routinely is critical because vision-related issues can be an indication of a broader health condition.

    2. Some Eye Diseases Are Symptom-Free

    Some health conditions like glaucoma, cataracts, and macular degeneration don’t have any early warning signs. Getting your annual eye exam can help your eye doctor detect otherwise-invisible health conditions before they progress.

    3. Your Vision Might Not Be as Clear as You Think

    People often ignore taking care of their eyes as part of their regular health maintenance. Many people believe that since they can see well, they don’t need to visit their eye doctor. However, getting routine eye exams is important regardless of age. Your eyes not only affect how you see, but how you feel. Your eyesight impacts your performance at work, school, and home. By having your eyes checked yearly this provides your eye doctor a baseline on how your vision may have changed since your last exam and can help catch treatable conditions earlier on.

    Ready to schedule your annual eye exam?
    Find a local VSP network doctor who is right for you and schedule your comprehensive eye exam today.

    Plus, you can get additional member savings and bonus offers when you visit a doctor who participates in the VSP Premier Program.

    After your eye exam, take advantage of the following exclusive offers:

    • Get an extra $40 added to your frame allowance now through October 31, 2021, when you choose frames from popular brands Cole Haan, Flexon®, Lacoste, Pure®, and Salvatore Ferragamo.
    • Get an additional 20% off glasses or sunglasses at your local VSP network doctor or at Eyeconic®.
    • Get $25 off Dragon sunglasses at Eyeconic® through September 30, 2021.
    • Purchase your annual supply of eligible Bausch + Lomb contact lenses and get up to a $250 mail-in rebate


    See Well. Be Well.® Make your eye health and eye care a priority by scheduling your annual comprehensive eye exam today. If you haven’t already, take advantage of your COSE member benefit and opt-in to VSP vision insurance. Contact your COSE sales representative or broker for more info.

    Information received through VSP Vision Care channels is for informational purposes only and does not constitute medical advice, medical recommendations, diagnosis or treatment. Always seek the advice of your eye doctor, physician or other qualified health provider with any questions you may have regarding a medical condition.

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  • Next up: Avoid becoming another Fire-Loss Statistic
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  • Avoid becoming another Fire-Loss Statistic

    Losses as a result of fire damage put a big dent into business operations every year. U.S. fires resulted in an estimated $11.6 billion in direct property loss during 2014, according to the National Fire Protection Association. On average, a civilian fire death occurred somewhere in the country every two hours and 41 minutes. There are a number of steps businesses can take to avoid becoming another fire-loss statistic, according to the Ohio Department of Commerce. These steps are centered around four main themes.

    Losses as a result of fire damage put a big dent into business operations every year.

    U.S. fires resulted in an estimated $11.6 billion in direct property loss during 2014, according to the National Fire Protection Association. On average, a civilian fire death occurred somewhere in the country every two hours and 41 minutes.

    There are a number of steps businesses can take to avoid becoming another fire-loss statistic, according to the Ohio Department of Commerce. These steps are centered around four main themes

    Create a fire safety plan

    It’s important that businesses have in place a fire safety plan that is reviewed annually. This plan will help employees identify actions that need to be taken to help prevent a fire. This plan should include:

    • designating an outdoor central meeting place that is well-marked;
    • establishing a process by which employees who are trained to use fire extinguishers are trained annually; and
    • acquainting the local fire department with your facility, its location and potential specific hazards.

    Housekeeping

    Keeping a tidy workplace environment can also help support the fire protection cause. Employees and employers should:

    • keep personal workspaces clean;
    • check heating units at least annually;
    • empty waste containers daily;
    • turn off non-essential electrical equipment at the end of each day;
    • ensure extension cords are the correct size and used for portable equipment only; and
    • check electrical outlets regularly to ensure they are not overloaded.

    Storage

    Workplace materials must be stored safely. This can be accomplished by:

    • keeping combustible materials at least 3 feet away from heat sources;
    • disposing hazardous materials properly; and
    • maintaining at least 24 inches between the top of a stack of materials and the ceiling.

    Fire Protection

    If fire does occur, it’s important to be prepared. Some fire protection tips include:

    • clearly marking all exit doors and removing any potential obstructions from the door;
    • allowing exit doors to be opened from the direction of exit traffic without the use of a key or any special knowledge or effort;
    • mounting fire extinguishers in accessible and identified locations;
    • keeping a space of at least 18 inches below sprinkler heads and checking the sprinklers annually;
    • testing emergency lighting every month; and 
    • keeping doors closed when rooms are not occupied (closed doors can act as a barrier to smoke and fire).

    Escape tips

    In addition, it’s important to keep in mind what should be done to escape a fire:

    1. If you see smoke, try another way to escape. If you have to escape through smoke, stay close to the floor.
    2. Check doorknobs and the space between the door and frame with the back of your hand before opening closed doors. If it is cool, open the door slowly but be ready to quickly close the door if smoke comes through.
    3. Elevators should not be used during a fire.
    4. Once you're out, STAY OUT. If someone else is trapped inside, tell the Fire Department. Fire gasses in the building are toxic and can kill.

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