Ohio Court Reverses Position on Post-Merger Noncompete Enforceability

In a rare procedural move, the Ohio Supreme Court reconsidered and reversed its May 24, 2012 decision in Acordia of Ohio, L.L.C. v. Fishel, 2012-Ohio-2297 ("Fishel I"). At issue was the enforceability of restrictive covenants in employee noncompete agreements subsequent to a  merger. In Fishel I, affirming the decisions of the lower courts, the Ohio Supreme Court held that all assets and property, including employment contracts and agreements, transferred through operation of law to the resulting company post-merger. The merged company, however, was precluded from enforcing its predecessor's noncompete agreements because the agreements did not contain language that extends to others, such as the company's "successors or assigns," and the noncompete agreements had expired as to all the employees involved.  

On October 11, 2012, the Ohio Supreme Court reversed its position in a 6-1 ruling (Pfeifer dissenting), holding that the surviving company could enforce the agreements as if it had stepped into the shoes of the original contracting company. See Acordia of Ohio, L.L.C. v. Fishel, 2012 Ohio LEXIS 2454 ("Fishel II"). 

To learn more about the decision, please continue reading Littler's ASAP, The Ohio Supreme Court Reverses Its Position on the Enforceability of Noncompete Agreements after a Merger, by Thomas Metzger and Melanie Houghton.

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.