A non-compete agreement offers some protection to a business. It’s designed to prevent departing employees from becoming your competition, but this legal paperwork only works if the courts in your area uphold it. It’s important to make sure it’s enforceable long before you need to do something about it.
Some states see non-compete agreements as a restraint of trade since they can get in the way of employees working in their chosen industries. Virginia courts are open to enforcing non-competes, but only if they’re seen as fair and reasonable. What does this mean for your business? Here are a few things you should know if you’re in Virginia.
Make Your Agreement Reasonable
Virginia courts want to see that a non-compete agreement is “reasonable.” If you’ve stated that the employee can never work for a competitor again, a court is far less likely to rule in your favor than if you’ve set a time limit of two years and kept it within a small geographic area. The bottom line is, your agreement can’t be so unreasonable that it keeps your former employees from working in the field in which they’re qualified without leaving town.
Give the Employee Something in Return
There’s also something called “consideration” that will come into play. In contract law, consideration stipulates that two parties must exchange something of value. If you’ve hired an employee and offered a non-compete agreement to sign in return for employment, the employment is “something of value.” If, on the other hand, you waited until the employee had worked with you for a few years, then presented the contract while offering nothing of value in return, the judge may take issue with the validity of the contract.
One of the biggest mistakes you can make with your non-compete is to make it too broad. If you simply state the employee can’t work for any competitor, with no specifics at all about who the competitor is, how long this prohibition is in place, and how far it reaches geographically, you likely won’t get results. However, a court may be more willing to overlook generalities when speaking of competitors if you kept it to your own town and limited it to one year.
In Virginia, judges will look at the agreement as a whole when factoring whether it’s enforceable or not. They’ll also consider the overall circumstances, such as the proof you provide that the former employee’s behavior has harmed your business. An attorney who specializes in Virginia law may be able to save you money long-term by reviewing your agreement and making sure it will hold up.