Business Already Existed On The Side
I work in the construction industry, specifically in concrete. Several months ago, I began to manufacture my own line of decorative concrete tables and vases that I have created on my own time using my own tools and materials. They are my own designs and I use techniques that are generally available within the concrete industry.
My employer has decided to narrow his market and focus more on decorative concrete. He was very angry when he discovered that I had been making the tables on my own and informed me that HE was planning to make tables and other items from concrete. He claims that he had told me some time ago of his intention, but he did not. He came to my home, and stumbled upon me in the middle of making the tables I designed.
My employer has now decided that he wants me to sign a no compete agreement for all decorative concrete and include a licensing agreement for me to make the tables that I have already been making. He would sell the tables on his own and take a percentage and if I sell the tables on my own, he would take a different percentage.
I suggested that he include an adendum in the no compete that states that I can continue to manufacture the tables and vases that I have designed but nothing else in the area of decorative concrete. He insisted that I could not do this and that his lawyer said it had to be a licensing agreement.
I don't think I should have to now make the tables under his company name and cut him a percentage. I believe that he is trying to profit from my idea.
He has indicated that the no-compete would have to be signed or there would no longer be work for me, but I am not sure if he will carry through on that.
Do I have to legally give him a percentage and sign the no-compete?
Answers (1)
A non-competition agreement is just that, an agreement. You have to agree to it. Your employer cannot impose it on you.
However, unless you have an existing contract, you are probably an at-will employee. This means your employer can end your employment at any time, for any reason. This would include ending your employment for the reason that your employer does not want you to compete against it. Therefore, as a practical matter, your employer can effectively force you to choose between your job and your business.
Separately, even absent a non-compete or a requirement that you choose between your job or your business, Ohio law places a duty on an employee to be "faithful," which means the employee cannot compete against the employer while employed or otherwise divert the employer's business to his or her own business. While it does not appear that you have done this so far, once your employer enters into your specialty concrete table business, the potential for a conflict with the "faithful employee" rule arises. Therefore, if you want to continue your own business, continued employment with your current employer may become very difficult.
Regards,
Neil.
posted by Neil Klingshirn | Oct 27, 2005 10:20 AM [EST]
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