The Court, for the sake of completeness, considers Defendants' argument as if asserted under Ohio law. Under that law, “a non-compete clause's enforceability is a matter of law for the court.” Chi. Title Ins. Corp. v. Magnuson, 487 F.3d 985, 990 (6th Cir.2007). “[A] noncompete covenant is enforceable to the extent it is reasonable.”
The covenant must: (1) be "no greater than is required for the protection of the employer"; (2) "not impose undue hardship on the employee"; and (3) not be "injurious to the public." Chi. Title Ins. Corp. v. Magnuson , 487 F.3d 985, 991 (6th Cir. 2007) (quoting Raimonde , 325 N.E.2d at 547 ). Union Home must establish each factor by "clear and convincing evidence."
The enforceability of Wilson's noncompete agreement turns on whether it is "reasonable." Chi. Title Ins. Corp. v. Magnuson, 487 F.3d 985, 990 (6th Cir. 2007). A noncompete agreement is reasonable under Ohio law if it satisfies three factors.
Our own de novo review applies the same standard and is constrained to the evidence presented to the district court at the time of its decision. See Chicago Title Ins. Corp. v. Magnuson, 487 F.3d 985, 995 (6th Cir. 2007); Weiner v. Klais & Co., 108 F.3d 86, 88-89 (6th Cir. 1997). Consequently, the hiring records, testimony, and admissions that appeared later are of no moment.
However, the cases Accenture cites—Chi. Title Ins. Corp. v. Magnuson, 487 F.3d 985, 990, 998-1001 (6th Cir. 2007); Inter Med. Supplies, Ltd. v. EBI Med. Sys., Inc., 181 F.3d 446, 463-70 (3d Cir. 1990)—are distinguishable. The punitive damages award in Magnuson was three times the amount of the compensatory damages award, see 487 F.3d at 990; the punitive damages award in EBI was $2 million more than the compensatory damages award, see 181 F.3d at 450.
. Title Ins. Corp. v. Magnuson, 487 F.3d 985, 991 (6th Cir. 2007) (quoting Raimonde, 325 N.E.2d at 547).
The Sixth Circuit has interpreted the repeated conduct factor as requiring "`that the similar reprehensible conduct be committed against various different parties rather than repeated reprehensible acts within the single transaction with the plaintiff.'" Chi. Title Ins. Corp. v. Magnuson, 487 F.3d 985, 1000 (6th Cir. 2007) (quoting Bach v. First Union Nat'l Bank, 149 F. App'x 354, 356 (6th Cir. 2005)). Here, Fastenal argues that this factor is met because, though there was only one sale of goods, the Tri-State Defendants have "continued to reap the benefits of the goods and the information they obtained from Fastenal."
Compare TQL/EDA, 685 F.Supp.3d at 575 (party seeking enforcement "must establish reasonableness under [Ohio law] test by clear and convincing evidence"), with id. at 578-80 (discussion of money damages); see also Chi. Title Ins. Corp. v. Magnuson, 487 F.3d 985, 991 n.3 (6th Cir. 2007).
But rather than consider the "necessary" factors, the court merely concluded that it was reasonable to "restrict an employee from moving to a competitor and taking customers and other employees with them for two years following the employee's departure" under Sixth Circuit precedent. Id. (citing Chicago Title Ins. Corp. v. Magnuson, 487 F.3d 985, 992 (6th Cir. 2007)). The court also relied on the fact that Hylant and Oswald require "nearly identical" non-solicitation agreements in finding the NDNSA reasonable.
For even where the jury has found an entitlement to punitive damages, the appropriate punitive damages award may still be zero. Chicago Title Ins. Corp. v. Magnuson , 487 F.3d 985, 1001 (6th Cir. 2007) (applying the State Farm factors and holding that the district court erred in upholding a jury verdict for any punitive damages following the jury's $32.4 million punitive damages and $10.8 million compensatory damages award). In making that threshold assessment, the "most important indicium of the reasonableness of a punitive damages award is the degree of reprehensibility of the defendant's conduct."