In our last post, we began speaking about some of the general rules that apply when Virginia courts review covenants not to compete, which are agreements that restrict the ability of an employee to work for or as a competitor to an employer upon leaving that employer.
As we noted, perhaps the most important factor courts will look at is whether the covenant is reasonably restrictive of the employee, or overly broad and restrictive. Agreements which make it unduly difficult for an employee to obtain other work and which are broader than necessary to protect a company’s legitimate business interests are going to be more likely to come under scrutiny and not be upheld by courts in Virginia.
It is worth pointing out that when courts in Virginia review covenants not to compete, they review each agreement on its own merits so that the specific restrictions on the employee can be adequately balanced against the circumstances of both the employer’s business and the employee’s search for new work. Because of this, it is difficult to identify general rules that employers should follow when establishing these agreements.
For employers, working with an experienced legal advocate is indispensible, not only when setting company policy regarding covenants not to compete and negotiating specific terms, but also when disputes arise with respect to these agreements. Even the best planning cannot eliminate all possibility of litigation on this issue, and working with experienced counsel can help ensure a business’ rights and interests are protected and advocated.