North America

The Ohio Supreme Court recently held that when a company that was the original party to a noncompete agreement merges in to another company, unless the noncompete agreement contained a “successors and assigns” clause, the merger is a termination of employment which triggers the running of the restrictive period in the noncompete.

In this decision, Acordia of Ohio, L.L.C. v. Fishel et al., employees of companies that later merged into another company signed two-year, post-employment noncompete agreements. These noncompetes did not contain language commonly found in noncompetes providing that the agreements could be assigned and/or would be carried over to a corporate successor. Rather, by their terms, the agreements were “between only the employees and the companies that hired them.” As such, the agreements “appl[ied] only to ‘the Company’ with which the employees agreed to avoid competing, not the company’s successors.”