Lawsuits and Non-Compete Agreements

I hate noncompete employment contracts.  These contracts inhibit innovation and crush the soul (and finances) of young entrepreneurs who want to be the next Bill Gates, Steve Jobs, or even Walt Disney.  Unfortunately, these restrictive contracts are becoming more and more common. We see them in every job or profession from doctors to retail salesman to contractors to IT professionals to engineers to restaurant chefs, and on and on.

The proliferation of noncompete contracts has also lead to a dramatic increase in lawsuits.  A recent article by Ruth Simon and Angus Loten in the August 15 edition of the Wall Street Journal paints a troubling picture.  The article reports a more than 60% rise in lawsuits against employees for violating non-compete agreements during the last decade.

What does this mean?  It means there are fewer startup companies…fewer patents issued…and, fewer advances in science, medicine, and technology.

The news is not all bad.  The article mentions several states which are being proactive in limiting the effect of noncompetes.  New Hampshire will not enforce any noncompete which was not provided to the job applicant before or at the time of the job offer.  Massachusetts is considering passing a law which would only allow for the enforceability of noncompete contracts lasting 6 months or less.  California has passed laws which makes most noncompetes void.  My home state of Virginia has done nothing.

If you are presented with a noncompete in connection with a job offer…you better read it closely.  Even better, talk with a lawyer who practices in this specialized are of the law, it might just save  you a lot of headaches (and money) in the future.

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.