A recent federal court decision should not be read to lull employers into complacency when enforcing non-compete agreements. In GCA Services Group, Inc. v. ParCou, LLC, the United States District Court for the Western District of Tennessee held that, in a discovery dispute between the parties, information about GCA’s other attempts to enforce non-competes was not relevant to the lawsuit because there is no legal authority in Ohio to support the selective enforcement defense that was raised by ParCou.
What is selective enforcement?
Selective enforcement is a defense sometimes raised by defendants to argue that a non-compete should not be enforced against them because an employer has elected to not enforce similar non-competes in the past. The court found that GCA’s selective enforcement of its non-competes was irrelevant to the issue of whether the non-competes are enforceable because:
- Ohio courts do not recognize the selective enforcement defense.
- Documents and information sought for purposes of establishing the selective enforcement defense were not relevant and not discoverable.
With this decision, the court reiterated that if an employer makes a decision not to enforce a non-compete against a former employee, any future decision to enforce a non-compete against a different employee is irrelevant to the enforceability of the non-compete. Under Ohio law employers may selectively enforce restrictive covenant agreements without fear that selective enforcement will adversely affect enforcement of their restrictive covenant agreements in a lawsuit.
Best practice for enforcing a restrictive covenant
However, this decision should not be read as a license to not enforce your contractual rights or to delay in doing so. The best practice is to enforce any contractual or legal rights if there is a violation of a non-compete or other restrictive covenant and to do so quickly. If an employer does not move quickly when a restrictive covenant is breached, there is a greater risk that a court may not find irreparable harm to the employer based on the actions of the employee, which may limit the employer’s available remedies.To learn more about protecting your company's business assets, check out our recent Business Hour. For questions, contact a member of our trade secret, non-compete and unfair competition team.