HOW A NON-COMPETE CASE PLAYS OUT IN COURT
I just finished explaining to a caller, that some non-compete cases focus on the law, and some on the facts.
What do I mean by this and why should you care?
Under Virginia law, non-compete agreements are decided on a case by case basis.
When the law defines a case:
An employee, once sued, could ask the court to decide “as a matter of law, the non-compete at issue is overbroad, unreasonable and therefore unenforcebale.” This is typically done toward the beginning of the case and is called a Demurrer. I am sure that word means something in Latin, but I must admit I don’t know what.
If the court feels it can decide whether the contract is valid, without any additional evidence – it can rule on Demurrer that a contract is unreasonable.
Some courts and judges do this with frequency. I am finding however, that judges are increasingly hesitant to kick a case out of the court (or a count in the case like Breach of Contract), before evidence is taken on Demurrer. So while it is common place in my practice (when a contract arguably is overbroad) to file a Demurrer or Motion to Dismiss under Federal Law, it is not common place for courts to be decisive at this early stage.
For example, this week in Loudoun County, Judge Horne, when asked to rule on Demurrer as to whether a non-compete was reasonable, the court in Mileston Construction Servs. Inc. v. Lynch, held that additional facts may be necessary to determine whether the clause / contract at issue was enforceable.
So while legally speaking, the court had the right to toss the contract as a matter of law, but it declined, saying “it may come down to the facts” or ” I can’t rule without additional information.”
When the facts define a case:
Therefore, when the facts define a case, wow, you better save your money because litigation is going to take awhile and be pricey.
When facts define a case, you have to spend time in discovery developing the facts and telling a judge why the facts matter and why the facts and the law should be decided in your favor.
Employees even with good FACTS don’t want to litigate based on the facts. Because it gets costly and takes forever. And you have to pay an attorney to argue your good facts.