I came across a well written article and Virginia law update this morning on a recent Virginia Supreme Court decision that has had a direct impact how attorneys handle non-compete agreements in Virginia courts.
In the past, if an employee wanted the court to decide if his or her employment agreement was valid and binding, the Court could make a decision as a matter of law, upon a review of the contract, and decide whether the contract was reasonable and binding.
The court’s ruling could be based on the language of the contract, alone. Which meant parties didn’t have to spend months in discovery, taking depositions, sharing documents, and spending thousands and thousands of dollars in attorneys fees.
Also, if an employer sued a client for a breach of his or her contract, the employee could file a demurrer which is a document asking the court to make a legal determination as to whether the case can go forward. This too allowed the Court to review the document and provided a chance the Court would decide the contract was or was not reasonable, binding and valid prior to the parties spending excessive time and money.
Starting last year (2013), we saw a trend where judges felt uncomfortable making these decisions as a matter of law, and instead wanted to do make them based on the law AND evidence relating to each case.
Recent Supreme Court rulings have now (at least for now) taken away our inexpensive less expensive access to the judge on demurrer, or motion for judgment before expensive discovery is taken.
It’s good news for employers, who tend to have more money for attorney’s fees and can wear employees down in litigation by out spending them. It’s also bad news for employees because our access to the judge in early stages of litigation has now been changed extensively.
The Court explained: Because “[a] demurrer does not permit the trial court to evaluate and decide the merits of the claim set forth in a ․ complaint,” Concerned Taxpayers, 249 Va. at 327, 455 S.E.2d at 716, the circuit court erred when it sustained Malyevac’s demurrer on the ground that “the provision is unenforceable” as a matter of law and dismissed the entire complaint for that reason. Therefore, we will reverse the circuit court’s judgment sustaining the demurrer and remand the case for further proceedings.”
The only winners in this decision are the attorneys who bill by the hour. Hoping for a sea change in Virginia law in the future. Until then, even the most ridiculous non-compete will be examined in light of evidence shared and presented by the parties.