I have a private agency which provides services for children with disabilities. The services are provided under programs administered by the Dept of Health, and Dept of Education in Ohio. I've established a second regional office in another state (Ohio) as a test case to determine if our business model which was successful in our first office, would be successful again in the second regional office. Our objective was to determine, if our model would be successful in another state, if we used the same marketing strategy, human resource techniques, sales lead generation, back-office operations, billing, invoicing, and resource management techniques. I'm currently going through a divorce, and the manager of the regional office is my wife's brother. Even though I've been open with him, and told him that our business relationship was totally separate from what was happening between his sister and myself, there is still a threat that he will leave the company and take all the clients, and therapists with him. I do not have a contract with him. It is at-will employment. I give him a strictly commission based payment structure, but had paid him a salary for the first two years of operations to give him time to understand the business and how we operated. The intent was to provide him with a salary so that he could begin the business without the stress and pressure of making a sale to generate income. After the divorce proceeding began, I tried to get him to sign a non-compete, non-solicitation agreement to prevent him from taking the business with him, to protect my own interests. However, he has avoided the issue and to date has not signed the agreement. I'd like to know what protection do I have to prevent him from taking the business that my company provides to those clients in Ohio. I started the company, took the risk to make it succeed in my first office, took the risk to start the second office in a different state, funded his salary, started the marketing campaign, initially marketed to the clients as well. The problem is that he has the relationships with the clients and therapists. What protection do I have, or what suggestions do you have? I'm looking for someone familiar with the Laws in Ohio and knowledge of specific cases.
State/Country relating to question: Ohio
Nothing to date.
Hi and thanks for your question.
The problem is that without a signed noncompete/nondisclosure agreement, you do not have protection and your brother in law can leave and can take both employees and clients with him.
You could have causes of action if you can prove he stole information from you but these cases are difficult to prove and win.
Is it possible that you can offer him some incentive to sign the noncompete/nondisclosure?
It would actually be better for you had the agreement signed in conjunction with a raise - because there is case law holding that requires consideration in exchange for signing such an agreement, and in fact agreements have been held invalid if they are signed without consideration.
Consideration has been held to be either the offer of a job (i.e. the agreement is signed upon commencement of the employment) OR a raise if the agreement is not signed at the outset of the employment.
Therefore, it would be beneficial to you as well as being an enticement for him to sign, if you offered him an increase in salary or commission or some sort of increased compensation in exchange for signing an employment agreement which contains a nondisclosure/noncompete.
Unfortunately, the fact that you took all the risk and funded all the start up will not help you if he decides to go out on his own. Your very, very best bet is to get that noncompete signed and to make sure it is written properly so that you are protected. Noncompetes are not completely favored in the law, and if they are written too broadly courts will not uphold them. For this reason, if he does agree to sign, I recommend hiring an Ohio attorney experienced in this area of law.
Thank you Kathie, I took your advice and just hired an Ohio attorney,
Thanks for your advice.
You are very welcome. I hope you are successful - that's a bad situation to be in. I know from personal experience as I just went through a divorce - not fun. Best of luck to you.
Hello. I hope that everything is going well with getting your brother in law to sign a valid noncompete, and that the information I provided to you has been helpful. If so, kindly take a moment to rate me one of the top three levels so that I may be paid for my time. If not, just let me know what additional information you would like, so that I can continue to assist you until you are completely satisfied. Thanks!
DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.
The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).