Here is a common scenario if you wait too long to review your non-compete contract.
A client has left their job and wants to start a new business or join a competitor. After a careful review of the non-compete contract, we offer the following no-nonsense advice:
“Your contract seems valid under Virginia law – it’s limited and not too broad. If you take the job with XYZ Company, please be aware that you will be in breach and will likely get sued.”
Even if the contract is invalid, we provide the same advice:
“Your contract may or may not be valid, but you are going to get sued if you take that job or start that new business.”
In each of these cases, a former boss will threaten a lawsuit, even if the contract is invalid. Not fair, right?
Our client wonders if his employer has gone to far:
“Yeah, but Virginia is a right to work state, right? I mean they can’t prevent me from making a living.”
Note: While Virginia is a right-to-work state, that in no way relates to your non-competition agreement, at all, period. Read this article or this article for more information on right-to-work laws in Virginia.
So we say the following:
“Well, actually, you signed an agreement that says they can prevent you from making a living in that area. So yes, they can do that depending on the scope of the agreement.”
Then, the client asks about recovering attorneys’ fees:
“So, if they sue me and lose, I can sue them right, and get attorneys’ fees and all my costs and even more for filing a frivolous lawsuit?”
To which we reply:
“Well, no. You can’t get fees if your contract doesn’t provide for it and there is no automatic right or cause of action under Virginia law which allows you to sue someone merely because they sued you.”
Now, I have seen it argued that employees, wrongly accussed, have a right to seek sanctions and file various tort claims in response to a non-compete lawsuit. But here is the kicker: there is not a single Virginia case that I know of where this has been successfully attempted.
So my answer remains the same: “No, you don’t automatically have the right to sue them in response.”
Here is the bottom line, fair or unfair: Under Virginia law, if you sign a valid contract, you are probably bound by it. If you signed any contract and leave, you could get sued valid contract or not.
Bottom line: Don’t wait to obtain a a comprehensive review and evaluation of your non-competition agreement. It’s better to review now, then sign later, so you can avoid future disputes. If you need help navigating the waters from contract to new job, give us a call at (540) 985-0098.