2021 Ohio 394
Ohio Ct. App.2021Background
- Geloff was hired by R.C. Hemm’s Glass Shops in April 2015 as a field glazier and executed a non‑compete/non‑disclosure agreement; he signed an identical second agreement when promoted to foreman in January 2019.
- The agreements barred competitive employment for two years post‑termination in six states (including Ohio) and prohibited disclosure/retention of confidential information (the non‑disclosure provisions had no temporal or geographic limits).
- Geloff left Hemm’s in June 2019, took a job with another glazing employer, and Hemm’s sent cease‑and‑desist letters asserting the agreement.
- Geloff sued for a declaratory judgment that the agreement was unenforceable; Hemm’s counterclaimed. The trial court dismissed counterclaims tied to the non‑compete, allowed non‑disclosure claims to proceed, and granted summary judgment for Geloff that the Agreement was unenforceable under the Raimonde factors.
- Hemm’s appealed, arguing (1) genuine issues of material fact precluded summary judgment and (2) the court should have reformed the covenant rather than voiding it.
Issues
| Issue | Plaintiff's Argument (Geloff) | Defendant's Argument (Hemm's) | Held |
|---|---|---|---|
| 1) Did genuine issues of material fact exist about whether Geloff possessed confidential information or trade secrets? | Geloff: No — he had no proprietary training, pricing, sales techniques, or access to confidential lists; his customer contacts were routine. | Hemm's: Yes — Geloff was familiar with Hemm’s customers and its customer list and thus possessed confidential information. | Held: No genuine issue. Hemm’s presented only conclusory/contradictory assertions and had publicly disclosed several customers, undermining any claim that identities were secret. |
| 2) Does the covenant forbid unfair competition (enforceable) or ordinary competition (unenforceable)? | Geloff: The covenant would bar ordinary competition because he worked as an installer, not in sales/marketing or running a competing business. | Hemm's: The six‑state restriction was reasonable because Geloff later worked for a business in the same industry — constituting unfair competition. | Held: The restriction would suppress ordinary competition. Hemm’s produced no evidence that Geloff engaged in sales/marketing or other unfair competitive conduct. |
| 3) Is the employer's benefit from enforcement disproportionate to the employee’s detriment? | Geloff: Enforcement confers no real benefit because no misappropriation or unfair competition occurred; enforcement would unnecessarily prevent him from earning a living. | Hemm's: Enforcement protects Hemm’s business interests across its service area. | Held: Benefit disproportional. Without evidence of trade‑secret misuse or unfair competition, enforcement would unfairly burden Geloff. |
| 4) Were Geloff’s skills and experience developed by disclosure of proprietary processes (supporting enforcement) or are they common trade skills? | Geloff: Skills were manufacturer‑provided and common to the trade, not proprietary to Hemm’s. | Hemm's: Geloff gained invaluable training and experience at Hemm’s that justify enforcement. | Held: Skills were common trade knowledge; Hemm’s produced no evidence of unique proprietary training. |
Key Cases Cited
- Raimonde v. Van Vlerah, 42 Ohio St.2d 21 (Ohio 1975) (sets nine‑factor test for enforceability of employee non‑competition covenants)
- Harless v. Willis Day Warehousing Co., 54 Ohio St.2d 64 (Ohio 1978) (summary judgment standard: no genuine issue of material fact)
- Mitseff v. Wheeler, 38 Ohio St.3d 112 (Ohio 1988) (movant’s initial burden in summary judgment; procedural framework)
- Dresher v. Burt, 75 Ohio St.3d 280 (Ohio 1996) (explains evidentiary burdens for Civ.R. 56 movant and nonmovant)
- Zivich v. Mentor Soccer Club, Inc., 82 Ohio St.3d 367 (Ohio 1998) (de novo review of summary judgment and related standards)
- Wiebold Studio, Inc. v. Old World Restorations, Inc., 19 Ohio App.3d 246 (Ohio Ct. App. 1985) (skills of common trade knowledge are not trade secrets)
- Hidy Motors, Inc. v. Sheaffer, 183 Ohio App.3d 316 (Ohio Ct. App. 2009) (court may modify/limit an unreasonable covenant but is not required to do so)