I have had many people call our office and say after some research, they started their own business, competed, etc., because “Virginia courts do not look favorably on restrictive covenants” ie – non-compete agreements.
Yes, Virginia courts constantly recite that line, as frequently as Dororthy in the Wizard of Oz says “there is no place like home.” But those are just words, and in the same opinion where a Judge will say “Virginia courts do not look favorably…. blah blah blah” the Court will uphold an agreement and prevent an employee from working.
Courts examine each agreement on a case by case basis, and if reasonably tailored and not over broad, they will uphold the language and stop you from working. GOT THAT. They will rule against an employee.
The fluffy mantra (“Virginia courts do not look favorably”) simply means that Courts will not uphold an agreement simply because you agreed to it. They will however, uphold many non-compete agreements if they are reasonable.
Here are the factors of an enforceable non-compete agreement:
1. reasonable time restriction (2 years or less is typically reasonable in VA – sometimes 3 years is reasonable)
2. reasonable scope – only limited to (a) the work you actually did; (b) prohibits you from working for an actual competitor in the industry.
3. reasonable distance – in some industries, a geographic restriction is needed to make your agreement reasonable. There are VA. case however where world wide restrictions have been upheld because the job / industry was so unique.
So, if I wrote that Virginia Courts actually look DOWN on non-compete agreements in practice, I it would be a half truth… maybe an April Fool’s Joke.
Truth is, they do uphold these agreements everyday. And even in the cases where employees win, they spend two years in Court, and aloto f $ on attorneys fees.