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Distance in a Non-Compete Agreement Measured "As the Crow Flies"


Ginn v. Stonecreek Dental Care - Court of Appeals, Twelfth Appellate District of Ohio


Facts:  Dr. R. Douglas Martin ("Martin") sold his dental practice to an employee who worked there, Dr. David Ginn ("Ginn").  In doing so, Martin and Ginn signed a contract for the sale which contained a non-compete provision that prohibited Martin from engaging in business "within 30 miles" of the practice for five years starting from October 2010.  While Martin initially stayed on and worked with Ginn for a period, the relationship subsequently deteriorated between the two and Martin went to work for another dental office.  The new dental office was less than 30 miles away when measuring the distance in a straight line.  However, when driving between the offices, the distance was more than 30 miles.

Ginn filed a claim against Martin on the grounds that Martin breached the non-compete.   At the trial court level, the court found that "within 30 miles" referred to a straight line distance rather than a driving distance.  Ginn subsequently appealed the ruling.

Holding:  The Court of Appeals began its analysis of the non-compete language with a reference to Martin's previous argument that parol evidence should have been considered when interpreting the non-compete provision.  (For those unfamiliar with parol evidence, the parol evidence rule prohibits the use of extrinsic evidence when interpreting the terms of a contract.  Parol evidence may be considered, however, when a contract has not been fully integrated.  As a result, without evidence of fraud or mistake, the parties' final written terms of their agreement may not be varied, contradicted, or supplemented with additional evidence.)  Martin argued that since he and Ginn had interpreted "within 30 miles" differently, there was no "meeting of the minds" necessary to create an integrated contract.  However, the Court pointed to language in the agreement which stated it was "a final expression" of the agreement and could be modified or rescinded "only by a writing signed by both parties...".

In addition, the Court noted that prior Ohio cases that dealt with the term "within" (in regard to distance) had held that the term referred to a straight line distance rather than a driving distance.  Consequently, the Court held that the phrase "within 30 miles" was plain on its face and unambiguous.    

Judgment:  The Court of Appeals affirmed the lower court's holding and found that the phrase "within 30 miles" in the non-compete agreement referred a straight line distance rather than a driving distance.  Consequently, Martin was found to have breached the non-compete agreement by working for a competing dental office that was within 30 miles (using a straight line/"as the crow flies" method) of his original office that he sold to Ginn.

The Takeaway:  I highlight this case as a reminder to employers that draft their own non-compete agreements (and because non-compete agreements are one of my favorite labor & employment law topics).  Each state may view distance restrictions differently; with this case serving as a prime example.  It is important to check whether your particular state measures distance by road, uses a straight line/"as the crow flies" method, or some other measurement to calculate distance restrictions.  Failure to properly keep up to date on what each state requires could result in an inadvertent breach of a non-compete agreement.  Whether intentional or not, that breach could result in hefty legal fees... 

Majority Opinion Judge:  Judge Powell

Date:  October 26, 2015

Opinion:  https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&ved=0ahUKEwiflqPWxLbKAhWJ2yYKHfaHBYQQFggnMAE&url=http%3A%2F%2Fwww.supremecourt.ohio.gov%2Frod%2Fdocs%2Fpdf%2F12%2F2015%2F2015-Ohio-4452.pdf&usg=AFQjCNFm_tQrMOOd1Gg-dOtm9DKNDaZNNg&sig2=m2KKoK5COJaEzkgnWh0xtw&bvm=bv.112064104,d.eWE&cad=rja

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