Do the same rules apply to employees who sign non-competes to business owners who sell their business but agree not to compete with the new owners?

The simple overwhelming answer is NO!

Virginia law provides greater protection to employees who sign non-compete agreements as a part of their employment. Why? Because most employees come to the negotiating table with prospective employers on less than equal footing. They can either take the job as offered (including the unfair non-compete) or they can turn down the offer of employment. Rarely are these employees represented by counsel and, frequently, have not even retained a lawyer to review the employment agreement and explain its legal effect.

On the other hand, when courts look at a transaction involving the sale of the business, they expect a degree of sophistication from the seller and the buyer. They also anticipate that both parties will either be represented by counsel or have the financial ability to hire counsel.

The Lesson: If you sell that business which you built from scratch and now think you can start all over again building the same business…you may be in for a surprise.

Dan Frith
Dan Frith

Dan Frith has over 25 years of experience representing individuals and families in cases of medical malpractice throughout Virginia. He has been named "Best Medical Malpractice Attorney" by Roanoker Magazine and is a member of the Million Dollar Advocates Forum. To speak with Dan, contact him by email at dfrith@frithlawfirm.com.