A non-compete clause is an agreement between two parties, usually employee and employer, that the employee will not enter into or start a similar business that competes with their employer. Employers like to use these clauses to protect trade secrets, ideas, and business practices.
Recently, a client brought an LLC Partner Separation Agreement that had a non-compete clause embedded into it that would have effectively kept the client from working within a five-mile radius from their home for over five years. This non-compete would have likely been defeated in court as Virginia courts require employers to show that:
- the restriction is no greater than is necessary to protect the employer’s legitimate business interest;
- the agreement is not excessively severe or oppressive in restricting the employee’s ability to find another job or make an income; and
- the promise does not violate a clear mandate of Virginia public policy.
Why not advise the client to simply sign the agreement and ignore the invalid non-compete clause?
Because this absurdly overbroad non-compete agreement (that a court would surely invalidate) would still likely have resulted in a lawsuit, leaving my client forced to litigate the claim. I advised this client to allow me to negotiation the terms of their separation, counter-offered an acceptable and narrowly tailored non-compete clause, and possibly avoided what could have been a costly complication.
If you are employed in Virginia and (1) have signed a non-compete clause or (2) are considering signing an agreement to not compete, or if you are a business that needs the advice of a qualified attorney, give my office a call at (540) 721-6028.
The article above is not intended as legal advice. We recommend you come to our offices for a proper legal consultation with our excellent attorneys to formulate a strategy which is suitable for your specific case.