CONSIDERATION in VIRGINIA NON-COMPETE AGREEMENTS

What is consideration?

It is not when your husband opens the car door for you. That is being considerate.

It is not when you think about a decision before you make it. That is considering your options.

Consideration in any Virginia Contract, is the mutual promise of performance.
I will agree to do X, in exchange for which, you will agree to do Y.
Often times in contracts you will see language like “for good and valuable consideration receipt of which is hereby acknowledged.”

Example:
I will give you $100,000 and you will give me the deed to your house.
I will agree to work for you for 1 year, and you agree to pay me $5,000 a month.
I will agree to cook your meals, in exchange for which you will give me a place to live.

Mutual promises.
Bargain of exchange.
Everyone gives / everyone gets.

But what if you have been working somewhere for 5 years and one day you are asked to sign a non-compete agreement? Clearly, you are being asked to give something up… what is the owner / business / employer giving to you in exchange?

In many states, additional consideration is required for this type of employment agreement to be deemed valid and reasonable. The employee would have to get a bonus, cash, extra vacation – SOMETHING they didn’t have before in order to balance what they are giving up.

Virginia however, is not one of those states. The Law in Virginia currently does not require employers to give you something extra. The courts feel that getting to keep your job is sufficient consideration.

So while I think it is the RIGHT thing for an employer to give something extra when asking a long term employee to sign a non-competition or non-solicitation, and while Virginia law may very well change on this point, the state of the Commonwealth today does not mandate additional consideration.

So while it would be considerate of an employer to give you a bonus when you sign a non-compete, and you may want time to consider your options, Virginia law does not require additional consideration to make the agreement valid. Apparently, keeping your job is consideration enough.

Lauren Ellerman

Lauren Ellerman

In 2011, Lauren Ellerman was named "Young Lawyer of the Year" by the Roanoke Bar Association for her work in the community. To speak with Lauren about your personal injury case, contact her at lellerman@frithlawfirm.com.