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.
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.
Under Ohio law, a non-compete covenant is reasonable if it (1) is no greater than is required for the protection of the employer; (2) does not impose undue hardship on the employee, and (3) is not injurious to the public. Chicago Title Ins. Corp. v. Magnuson, 487 F.3d 985, 991 (6th Cir. 2007) (citing Raimonde v. Van Vlerah, 42 Ohio St. 2d 21 (1975)). "Each of these elements must be established by clear and convincing evidence."
The district court's conclusion regarding the enforceability of the agreement is a question of law that this Court reviews de novo. Chi. Title Ins. Corp. v. Magnuson, 487 F.3d 985, 990 (6th Cir. 2007); Zep Mfg. Co. v. Harthcock, 824 S.W.2d 654, 663 (Tex. App. 1992). Under Texas law, "non-disclosure covenants are more readily enforced than non-competition covenants because they are not restraints on trade, do not prevent the employee from making use of the general experience he acquired during his employment, and do not offend public policy."