Life Isn’t Fair and Neither are Non-Compete Agreements

Consider the following four situations, and ask yourself (1) Is it fair? (2) Is it legal under Virginia law? and (3) Is it morally right?

 1.  Long-time employee spends years building relationships with clients. Clients LOVE him. They would follow him anywhere. After 7 years employee BOB is asked to sign a non-compete that says if he leaves or is fired he cannot serve his clients in any capacity for 2 years..

He tries to negotiate with them and they say – FALL IN LINE OR YOU ARE FIRED. He gets fired.

FAIR? / LEGAL? / RIGHT?   

2. On a Friday, employee is given a new non-compete agreement to sign. Says he cannot serve in industry, within 20 miles from office, or serve any clients, for two years from date of termination. Told he must sign right away. He signs. Monday his salary is cut by 1/2. He can’t pay his bills. Will need to look for another job. If he quits, he can’t work in his area, or his industry.

FAIR? / LEGAL? / RIGHT?   

3. Employee is told on a Wednesday that the business is being sold. New owners roll in with new contracts and tell employees they have 5 hours to review and sign, or they will be fired.

FAIR? / LEGAL? / RIGHT?   

4. Employee loses her job. She has kids at home and must work. She lives in a region where home sales have completely tanked. She can’t sell or move. She is offered a job in at a competitor but days after she accepts the job, her old company sends a letter saying they will sue both the employee, and her new company because she is in breach of her non-compete agreement. They try to negotiate. Old employer won’t budge. New company fires her for fear of being sued.

FAIR? / LEGAL? / RIGHT?   

The answer to all of the above situations: unfair, not right, but unfortunately, legal in Virginia.

So when someone tries to tell me that non-compete agreements are necessary to protect an employer from rogue employees trying to steal clients, I disagree. Good companies don’t need them if they treat their employees well. Bad companies need them as a way to threaten people into submission.

Am I exaggerating? Slightly. But I think anyone would be hard pressed to say the above examples are the way we should act and or treat one another in the work place.

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.