Selective Enforcement Not Viable Defense to Non-Competition Agreements Under Ohio Law
Employers sometimes worry whether seeking to enforce their non-competes in some circumstances but not others might preclude enforcement altogether in the future. Not so, says one court. Applying Ohio law, the United States District Court for the Western District of Tennessee, in GCA Services v. ParCou, held in a discovery ruling that information regarding an employer’s selective enforcement of its non-competition agreements is irrelevant to the issue of whether such agreements are enforceable.
In this case, ParCou hired several former GCA employees subject to non-competition agreements with GCA. In response, GCA sued ParCou and the former employees, alleging violations of the non-competition agreements and unfair competition. During discovery, ParCou requested information relating to previous attempts by GCA to enforce non-competition agreements against former employees. GCA objected to such requests on the basis of relevance, and ParCou filed a motion to compel discovery relating to GCA’s prior enforcement of non-competition agreements.
A Magistrate Judge denied ParCou’s requests for information pertaining to its selective enforcement defense, holding that selective enforcement is not a defense to claims of violation of non-competition agreements. In reaching that decision, the Magistrate Judge determined that the selective enforcement doctrine only applies in the context of criminal charges and civil regulatory enforcement. The Magistrate Judge declined to extend the selective enforcement doctrine to cases involving non-competition agreements because Plaintiff failed to provide case law supporting selective enforcement as a defense in such matters. The District Court affirmed the Magistrate Judge’s Order, and confirmed that there is no authority for the proposition that selective enforcement is viable defense in cases involving non-competition agreements. The District Court further stated that the only case offered by ParCou to support the viability of the selective enforcement defense, Petland v. Hendrix, did not reach the issue of whether selective enforcement is a viable defense, and that ParCou had provided no additional support for application of a selective enforcement defense.
The GCA decision provides support for Ohio employers to argue that selective enforcement is not a viable defense in cases involving an alleged breach of a non-competition agreement by a former employee. As such, an employer’s business decision not to enforce a non-competition agreement against a former employee should not negatively impact its chances of having a non-competition agreement enforced at a later time against a different employee.