Ohio may be the next state to place restrictions on non-competition provisions in employment agreements for employers, including healthcare providers. Ohio Senators Bill Blessing (R-Colerain Township) and Bill DeMora (D-Columbus) introduced Senate Bill (SB) 11, which would significantly impact an employer’s ability to restrict a former employee or independent contractor’s work[1]. The following types of provisions would be restricted in new employment agreements:

• Restrictions preventing the employee from working for another employer for a specified time period, specified geographical area or a similar capacity;
• Requirement that the employee pay for lost profits, lost good will or liquidated damages because the employment relationship was terminated; and
• Imposing a fee or cost on the employee (such as a replacement hire fee or retraining fee) or requiring the reimbursement of training expenses.

Any new agreement or modification to an existing agreement would be void after the effective date of the bill.

SB 11 also prohibits an employer’s ability to require an Ohio employee to pursue a claim against the employer in a venue outside of Ohio or agree to a choice of law provision that is not Ohio. This restriction does not include an employee who is represented by legal counsel when negotiating the employment agreement or an employee who opts to apply a choice of law that is not Ohio.

Employees would have a right to bring a civil action against their employer for violating these restrictions and could seek actual damages, punitive damages, injunctive relief and reasonable attorney’s fees. Employees may also file complaints against employers with the Ohio Attorney General and the Ohio Director of Commerce. SB 11 does not include exceptions for non-profit employers, high-level key employees or sale of a business, as was the case with the Federal Trade Commission’s Non-Compete Ban, which was ultimately set aside and blocked by a Texas District Court on August 20, 2024.

This bill would have an extremely broad impact on employers across the state. Healthcare providers of all kinds, including health care systems, nursing homes, and medical practices could be affected. Similar efforts in Ohio, specific to healthcare providers, have not advanced past legislative committee hearings. Specifically, SB 126, introduced in the 135^th General Assembly, proposed similar restrictions on non-competition provisions for physicians, physician assistants and advance practice registered nurses, but did not apply to nonprofit hospitals; and SB 150 introduced in the 134^th General Assembly, would have applied only to physicians.

Sponsor testimony was given in the Senate Judiciary Committee on February 12, 2025. Dinsmore will continue to follow any developments. If you have questions, please contact your Dinsmore attorney.