A great Q/A in the Washington Post from April – keep reading. Ms. Garcia is right on the money:
Can a Non-Compete Clause Be Too Competitive?
By Lily Garcia Special to washingtonpost.comThursday, April 26, 2007; 1:59 PM
I have worked for the same small company in Virginia for almost three years now. Yesterday, my boss presented the entire staff with hastily drafted contracts stating that we could not start a similar business or solicit clients within a few miles of our location for two years after leaving the company.
I live in a small town in a right-to-work state. I could be fired at any time for any reason. As a result, I am uncomfortable signing this contract. Can he fire me if I refuse?
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The short answer is “Yes.” Unless you have an employment contract stating otherwise, you can be fired for a good reason, a bad reason, or no reason at all. (The law, of course, has created some exceptions to that rule — you cannot be discriminated upon for such factors as sex and race, for example, or fired for reporting illegal corporate conduct. But it does not sound like that is what you describe.)
I am not aware of any law under which you could seek redress if you are fired for refusing to sign. Many employers require the signing of agreements limiting an employee’s ability to compete with their business. And as aggravating as this may be, the timing of the new policy is not illegal.
You appear to be at an uncomfortable crossroads — you can either risk losing your job or risk limiting your ability to start a business in the future.
That said, it may be helpful to know that non-competition agreements that are overly broad — in the scope of their time period, geographical reach, or type of work, for example — cannot be enforced. If you believe your employer’s non-competition agreement may be unenforceable, your least risky alternative might be to sign the agreement and, if needed, challenge it later on.
How do you know whether an agreement is solid? It is impossible to predict with absolute accuracy whether a non-competition agreement will be rendered unenforceable by a court. In your case, it sounds like the agreement is fairly limited geographically, but it may contain other language that reaches too far.
For a nominal fee, a contracts lawyer licensed in Virginia should be able to review the agreement and give you an intelligent opinion regarding its validity. Should you need a referral, the Virginia State Bar is a good place to start — or you can call the Virginia Lawyer Referral Service at 1-800-552-7977.
Lily Garcia has offered employment law and human resources advice to companies of all sizes for 10 years. To submit a question, e-mail email@example.com. We reserve the right to edit submitted questions for length and clarity and cannot guarantee that all questions will be answered.