Non-Compete Agreements in Virginia
Non-compete agreements in the Commonwealth of Virginia have undergone a bit of a change since 2020. We represent employees in non-compete agreements with their former or soon-to-be-former employers. A non-compete agreement is simply a contract where an employee or former employee agrees to a clause that bars competition with a former employer. If an individual violates the non-compete agreement or clause, there can be consequences or liability.
As a result, it is very important to obtain legal advice before signing a non-compete agreement if an employee is facing termination from employment or a decision to leave an employer. We assist Virginia employees and executives in evaluating non-compete issues and in attempting to resolve them.
What is a Non-Compete Agreement?
A non-compete agreement is a contract where an employee agrees to give up a right that they would otherwise have, in exchange for something from an employer. Quite often an employer ties a non-compete agreement or clause into severance payments.
The general purpose of a non-compete agreement is to ensure that a former employee does not use the knowledge that they have gained with an employer and then later attempt to compete against them using this knowledge.
Virginia Requirements for Non-Compete Agreements
In general, in order to be valid, a non-compete agreement in Virginia must be reasonable. An agreement that restrains competition, like a non-compete agreement “must be evaluated on its own merits, balancing the provisions of the contract with the circumstances of the businesses and employees involved.” Omniplex World Servs. Corp. v. US Investigations Servs, 618 S.E.2d 340, 342 (2005).
In Virginia, in order to be enforceable, a non-compete agreement must meet the following 3-part test, according to the Virginia Supreme Court. Under this test, the employer bears the burden to show that the non-compete agreement or clause is:
- no greater than necessary to protect a legitimate business interest;
- is not unduly harsh or oppressive in curtailing an employee’s ability to earn a livelihood; and
- is reasonable in light of sound public policy.
Modern Env’Ts v. Stinnett, 561 S.E.2d 694, 695 (Va. 2002); Assurance Data v. Malyevac, 747 S.E.2d 804, 808 (Va. 2013); Gordon v. Blue Mt. Therapy, 2021 U.S. Dist. LEXIS 105432 (W.D. Va. June 4, 2021).
Determining the enforceability of such an agreement “requires consideration of the agreement in terms of function, geographic scope, and duration, with these factors considered together.” Home Paramount Pest Control Cos., Inc. v. Shaffer, 718 S.E.2d 762, 764 (Va. 2011).
It is important to keep in mind that the courts when applying these tests in Virginia have become more employee-friendly in recent years. Non-compete agreements that are too vague or cumbersome may be invalidated. Courts are more likely to enforce non-compete agreements that are reasonable, have a limited geographic scope, and are precise in their terms.
Virginia Recently Barred Non-Compete Agreements for Low-Wage Workers
Virginia has also added a new wrinkle to protect low-wage workers from non-compete agreements. As of July 1, 2020, Virginia now prohibits employers from placing non-compete restrictions on low-wage employees. This law only applies to non-compete provisions that came into effect on or after July 1, 2020. See Virginia Code § 40.1-28.7:8.
Contact Us
When non-compete issues arise, it is important to get legal advice early and not wait until issues develop. These types of agreements, if already in effect, may still be renegotiated. If you are employed in Virginia and (1) have signed a non-compete agreement or (2) are considering signing an agreement to not compete, you should have the advice of a qualified Virginia employment lawyer. If you are in need of advice regarding non-compete agreements or clauses, please contact our office at 703-668-0070 or through our contact page to schedule a consultation. Please also visit and like us on Facebook or Twitter.