By David J. Marquardt of Duff & Kronfeld, P.C. posted in About the Law on Friday, April 3, 2015.
Imagine this scenario:
You used to work for a big government contractor, where you earned a decent living for several years. Although you enjoyed your job, you were ready to move on to something else. You decided on a smaller contractor, in the same general field, with more opportunity for wealth. A few months after starting the new job, you receive a letter from your ex-employer reminding you that you signed a non-competition agreement, and telling you to “cease and desist” in your new employment.
First, it is important to note that the Supreme Court of Virginia disfavors non-compete agreements. But, whether a covenant not to compete is enforceable against you is a matter of law, and many non-compete agreements are deemed enforceable limitations on an employee’s ability to work. There is no “bright line” rule in Virginia, and the enforceability of non-competition agreements is determined on a case-by-case basis. A Court will generally look to the following issues in making such a determination:
(1) Is the agreement itself a valid contract?
(2) If the agreement is a valid contract, is it reasonable?
(3) If valid and reasonable, has the employee breached the agreement?
(4) If the employee breached the agreement, has the employer been damaged?
Often times, the Court’s analysis focuses heavily on question (2): is the non-compete provision reasonable. The employer has the burden of proving that the provision is reasonable, in its geographical, durational, and functional limitations on the employee. The agreement will be struck down unless it is narrowly drawn to protect the employer’s legitimate business interest, is not unduly burdensome on the employee’s ability to earn a living, and is not against public policy.
Lastly, Virginia law holds that non-compete provisions will be strictly construed against the employer. In other words, if the language of the agreement is ambiguous, then the Court will interpret the ambiguity in favor of the employee.
Every agreement will be reviewed individually. Therefore, if you are an ex-employee being threatened by your ex-employer with a “cease and desist” letter or other attempt to preclude you from pursuing your career, you should move quickly. Don’t hesitate to contact an attorney at the Duff Law Firm if you require assistance in litigating your non-compete agreement.