Most employers have developed an “Employee Handbook.” The book contains the company’s policies on vacation and sick leave, health insurance, recognized holidays, benefits, grievance procedures, and on…and on….and on.

But what if that handbook states that, should the employee leave his/her employment with the company, he/she agrees not to compete with the company for a period of 2 years. Is such a statement, in the absence of a separate non-compete agreement, a binding contract upon the employee? Maybe…but maybe not.

The Virginia Supreme Court issued a decision in 1992 stating that Virginia had not adopted a rule that employees are contractually bound by clauses in an Employee Handbook. However, it did not say that Employee Handbooks could never be considered a binding contract.

Here is where the issue gets interesting. Almost all Employee Handbooks have language that says something like, “nothing contained herein shall be considered a contract of employment” and that the Handbook is merely a “summary of the company’s policies.”

Virginia courts have fairly consistently held that this type of limiting language undercuts any argument the Employee Handbook is a contract and that an employee can be fired or sued for breach of contract based merely upon the handbook.

My Take: If your Employee Handbook contains non-competition and non-solicitation language, and you have not signed a separate non-compete or non-solicitation agreement, then your employer may just be out of luck if you leave your job and go to work for a direct employer.

About the author

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.

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