Understanding Non-Compete Agreements

Non-compete agreements are often part of employment contracts, and they are highly common among the federal contractors of northern Virginia and Washington, D.C. As with any contract, you should review its meaning and potential impact on your future career with an attorney before signing anything.

Companies generally use non-compete agreements to prevent employees from leaving the company and immediately taking their experience and knowledge to a competitor. However, a company cannot restrict your right to work by imposing contract terms that are too broad in scope. Courts in some states don’t even enforce non-compete agreements. Virginia courts do, but they often rule on the side of the employee when there is a dispute over these contracts.

How Do Virginia Courts Evaluate Non-Compete Agreements?

Virginia courts use a three-pronged test when deciding if a non-compete agreement is enforceable or not. The agreement is valid if the following criteria are met:

1. the restriction is “no greater than is necessary to protect the employer’s legitimate business interest”
2. the agreement is not excessively severe or oppressive in restricting the employee’s ability to find another job or make an income
3. the promise does not violate a clear mandate of Virginia public policy

Courts also examine these factors:

• The length of the restriction: Common non-compete clauses last 30 to 90 days. Courts generally rule that restrictions longer than two years are unreasonable.
• The geographic range of the restriction: The geographic area of the restriction must correspond with where the employer does business.
• The extent of activity being restricted: This is the hardest part for courts to analyze. The employer must prove a legitimate business interest.

During litigation over non-compete agreements, the burden of proof is always on the employer to show how the agreement is valid.

Can an Employer Recover Damages From A Non-Compete Suit?

Courts rarely award employers monetary damages in cases involving non-compete agreements, even when they rule in the employer’s favor. Again, the burden of proof is on the employer to prove that the former employee benefited monetarily from breaching the agreement.

If a court rules in the employer’s favor, it will most commonly award the employer injunctive relief, which would force the former employee to cease working for a competitor for a given amount of time.

Schedule Your Consultation Today

Because of the potential impact a non-compete agreement can have on your ability to earn a living, it’s vital that you don’t sign one without having it looked at by an experienced attorney. James H. Shoemaker, Jr., has nearly 30 years of experience with employment law cases in northern Virginia.

Mr. Shoemaker can help ensure that you don’t sign an overly restrictive non-compete agreement. This is the surest way to avoid a lawsuit if you leave your current company. If you are involved in a lawsuit over a non-compete agreement, Mr. Shoemaker will fight for your rights as an employee.

Mr. Shoemaker serves clients in Virginia Beach, Hampton Roads, and Washington, D.C. Call (757) 223-4580 today to set up a consultation.