Covenants not to compete include both non-competition and non-solicitation agreements between businesses and their employees or contractors. Non-competition (or "non-compete") provisions typically restrict a former employee's ability to join a competitor for a specified length of time after leaving the former employer, and non-solicitation provisions (often thought of as a type of non-compete) restrict a former employee from soliciting business from the former employer's customers, or from soliciting the former employer's employees to leave the company and join a competitor.
In Virginia, non-compete and non-solicitation agreements are enforceable only if they are narrowly drawn to protect the employer's legitimate business interests, are not unduly burdensome on the employee's ability to earn a living, and are not against public policy. While Virginia courts have recognized that businesses should be able to protect their client base from ex-employees who may leave their employ but continue in the same line of business, what is less clear is exactly which post-employment activities can be restricted before a non-compete becomes overly broad and therefore unenforceable. Guidelines have evolved over the years, but each case will turn on its particular facts.
Generally speaking, Virginia courts will focus on the breadth of the activities being restricted, the relationship of those activities to those performed for the former employer, the geographic scope of the restriction, and the duration of the restriction. A covenant that restricts a former employer from owning stock in a competing company will typically be invalidated as overbroad even if the duration of the restriction is very short, whereas a covenant less restrictive in the activities it prohibits may also be invalidated if the restriction lasts an unreasonable length of time. If any aspect of the non-compete is deemed unreasonable, the entire clause will be stricken.
It is essential for both employees and employers to consult an experienced non-compete lawyer in Virginia because there is no "one size fits all" formula for enforceability. A non-compete agreement may be reasonable (and therefore enforceable) in one context yet unreasonable in another. The inquiry is fact-specific and each situation is different. To maximize the likelihood of enforceability, employers should consult an attorney to have a non-compete agreement customized for their particular business. The business will also need a lawyer when it comes to enforcing the agreement against a former employee who may need to be reminded of his or her obligations, or against whom an injunction is needed. If you are an employee seeking to join a competitor, you need to know whether your noncompete is enforceable and may want to seek prompt declaratory relief in court. In either situation, BerlikLaw founder Lee Berlik knows how to position non-compete cases for maximum trial advantage.