Although the Federal Trade Commission’s proposed rule banning non-compete agreements remains stuck in political limbo, states have, in recent years, begun passing or strengthening laws which ban or restrict these clauses. Now Ohio may soon follow suit, as its Senate is considering a total ban on non-compete agreements.
The Bill as Introduced
Senate Bill 11 was introduced by Ohio Senators Louis W. Blessing, III (R) and William P. DeMore (D) on January 22, 2025. Its proposed language prohibits employers from requiring or enforcing any agreement that restricts or penalizes “workers” (defined broadly to include employees, independent contractors, interns, and volunteers) for seeking or accepting new employment or operating a business after their employment ends. This includes agreements that:- Prevent workers from working for another employer for a specific period, within a certain geographic area, or in a role similar to their previous position.
- Require workers to pay lost profits, lost goodwill, or liquidated damages if they terminate the employment relationship.
- Impose a fee or cost—such as a replacement hire fee, retraining fee, or reimbursement for immigration or visa-related costs—when workers choose to leave.
- Demand reimbursement for expenses (e.g., training, orientation, or evaluation) that were intended to provide or improve the worker’s skills during employment.
Additionally, the proposed Bill voids any agreement entered into, modified, or extended on or after its effective date which requires a worker who primarily resides and does business in Ohio to adjudicate claims outside Ohio or deprives them of any of the State’s substantive legal protections. However, the Bill does provide an exception for this if, at the time of negotiation, the worker is independently represented by legal counsel (not chosen or paid by the employer) and the worker personally designates the venue or forum for any dispute or the governing law.
In terms of penalties, Senate Bill 11 permits workers or prospective workers to bring a civil action against an employer for any violation, with the possibility of recovering costs and reasonable attorney’s fees, actual damages, punitive damages up to five thousand dollars, and injunctive relief. A worker or prospective worker may also file a complaint with the attorney general or the director of commerce. If the attorney general or director investigates and determines that a violation likely occurred, the attorney general may bring an action on behalf of the worker or prospective worker, and if successful, the court must award the same remedies to the attorney general.
As of this Article’s writing, Senate Bill 11 has been referred to the Ohio Senate’s Judiciary Committee, where it will go through debate and amendment. The first hearing on the Bill is scheduled for February 12, 2025. Anyone looking to testify before the Committee in regard to the Bill should begin that process now.
What Now for Employers
If the Bill is enacted, Ohio will join the growing group of states that have effectively banned non-compete agreements, with Minnesota being the most recent to do so in 2023. The Bill’s current language is notably strict, lacking any salary thresholds and containing no provision for grandfathering existing agreements. Its prohibition on “enforcement” makes clear that any previously signed non-competes would be rendered unenforceable once the legislation takes effect.While the Bill moves through the legislative process, employers should remain vigilant and start reviewing their existing agreements in preparation for what may be a sweeping overhaul of restrictive covenants in Ohio. If the Bill becomes law, any attempt to enforce a non-compete once it takes effect will result in significant legal and financial consequences. As a result, employers will likely need to invest substantial effort in devising new ways to protect their business interests, trade secrets, and client relationships without relying on non-compete restrictions. It is critical to consult legal counsel now to evaluate existing contracts, explore alternative protective measures, and develop contingency plans in anticipation of Senate Bill 11’s potential enactment.
Zashin & Rich will continue monitoring Senate Bill 11 as it progresses and stands ready to assist employers with strategic guidance and compliance.
*Ami Patel is Z&R’s Practice Leader for Trade Secrets/Non-competes. She works extensively in trade secret and restrictive covenant litigation. Stephen Zashin is Z&R’s Managing Partner and also has worked extensively representing clients in trade secret and restrictive covenant litigation. Ami and Stephen have brought numerous trade secret cases to verdict. For more information on matters concerning Senate Bill 11 or non-compete agreements generally, contact Ami J. Patel (ajp@zrlaw.com) or Stephen S. Zashin (ssz@zrlaw.com) via email or by phone at 216.696.4441.