A great number of people who call our office live out of state, but have non-compete contracts or employment agreements that state they are written under Virginia Law.
Often, we will get calls from Virginians who assume we can assist them with a non-compete agreement but upon further examination, we discover Virginia law does not apply to their agreement. The law of another state applies.
How can you tell what state law applies?
Well – the first place to look is in the contract itself.
Many, but not all Contracts have what is called a CHOICE OF LAW provision – a small paragraph (usually toward the end of the Contract) that states what Court or State law will apply to the formation and application of the Agreement.
Choice of law provisions are often binding because the Court assumes you read the agreement and agreed to be bound by the law of whatever state is listed.
IF you are asked to sign a non-compete agreement and another state law applies, you should find out what the law in that state is when it comes to non-compete agreements. TRUST ME, EVERY STATE IS DIFFERENT.
Florida, Oklahoma have statutes that apply to whether non-competes are reasonable. California law finds employee non-competes to be against public policy. Georgia is enacting a new law right now about them. In Virginia, there is no Code statute, they are determined on a case by case basis.
Bottom line. EVERY STATE LAW IS DIFFERENT.
So what if you agree to be bound by another state law – does that mean you will be forced to go to Court in another state?
YES – you may have to do that.
And you may have to hire an attorney in another state.
So if you are presented with an Agreement, and another State’s law applies, find out why. Are their laws more favorable to employers? Is the company headquartered there?
And if you don’t want to be bound by the law of that state, you can always try to get your home state / Courts to apply.
Bon Chance – which is GOOD LUCK!