Small Business Owners Fuel Economy – But What About Non-Competes?

Just this week, I was speaking to a Virginia resident who wanted to open his own business. He has the time. The money. The talent. But he he can’t open the business.

He can’t because he signed a contract that says for a period of time he will not open a business, or work for a competitor within 15 miles of his current office.

He could (a) create jobs; (b) feed his family; and, (c) serve the public – all of this without harming his old employer or using their secret or trade secret information. So really, isn’t capitalism in favor of this kind of growth? Isn’t our unsteady economy reliant on it? 

According to the Washington Post:

Slowly but surely, small businesses are starting to accelerate their pace of hiring, helping drive down the overall unemployment rate to a four-year low last month.

Small business owners increased employment by an average of 0.14 workers per company in April, according to the latest report from the National Federation of Independent Business. That’s still slow growth by historic standards, but it marks the fifth consecutive month of gains after a topsy turvy year in 2012.

So again, I ask you is it good, bad, right or wrong that he can’t open this business? Who benefits from his bargain? Only his old employer. Not his county. Not the citizens. Not the economy.

But what if he is fired from his old job, and STILL PROHIBITED from starting this new business? Does that seem right? Legal? Ethical?

Sadly, under current Virginia law, the fact you are let go has no bearing on whether your non-competition or non-solicitation is valid and enforceable when you leave. You can be fired, have the time and talent to open a new business, hire employees and improve lives, and you may not be able to.

How is that for economic recovery?

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.