04/02/25

The Ohio Bankers League (OBL), alongside other leading business organizations, has formally opposed Ohio Senate Bill 11, which seeks to ban non-compete agreements and other restrictive employment contracts. In a letter addressed to Senate President Rob McColley (R-Napoleon) and other Senate members, the OBL expressed significant concerns about the bill’s impact on Ohio’s banking sector and overall economic competitiveness.

Key Provisions of Senate Bill 11

As introduced, Senate Bill 11 prohibits employers from imposing any agreements that:

• Restrict employees from working for a competitor or starting a business after leaving their job.
• Require workers to pay penalties for terminating employment, such as liquidated damages or reimbursement of training expenses.
• Enforce employment-related contract requirements dictating venue or choice of law provisions outside of Ohio.
• Impose conditions that deprive Ohio-based employees of other protections under state law.

Any agreement violating these restrictions would be rendered void under the legislation.

Impact on Ohio’s Banking Sector

Ohio’s banking industry relies on reasonable non-compete agreements to protect confidential customer relationships, proprietary strategies, and trade secrets. The passage of Senate Bill 11 could lead to several unintended consequences:

1. Increased Talent Poaching – Without enforceable non-compete agreements, banks may struggle to retain experienced employees, potentially losing key personnel to competitors.
2. Weakened Confidentiality Protections – While non-disclosure agreements exist, non-compete clauses provide an added safeguard against the misuse of sensitive information.
3. Rising Training Costs – Banks invest heavily in training and developing employees. The inability to recover these costs if an employee leaves soon after being trained could discourage institutions from providing robust professional development programs.
4. Competitive Disadvantage – Neighboring states with more flexible employment laws could become more attractive for financial institutions looking to expand, potentially stunting Ohio’s banking sector growth.

Ohio Bankers League's Position

In the joint letter opposing Senate Bill 11, the OBL emphasized that non-compete agreements are already subject to judicial scrutiny. Courts ensure that these agreements are reasonable in duration and scope, do not impose undue hardship on employees, and serve legitimate business interests. The OBL argues that a blanket ban disregards industry-specific needs and fails to acknowledge that employees are not obligated to sign non-compete agreements unless they voluntarily accept the terms of employment.

Furthermore, the OBL highlighted that eliminating non-compete clauses would place Ohio banks at a competitive disadvantage compared to states like North Carolina, Tennessee, and Texas, where employment agreements remain more flexible.

What’s Next?

The OBL urges member banks to stay engaged with legislative developments and advocate for balanced employment policies that protect both employer interests and workforce mobility. The OBL will continue to work closely with lawmakers to ensure that Ohio maintains a strong, competitive financial sector that supports business growth while upholding fair employment practices.

For further information on how Senate Bill 11 may impact your institution, or to participate in advocacy efforts, please contact the Ohio Bankers League Government Relations team.