If you have been asked to sign a non-compete agreement, you likely have questions. What is a non-compete agreement? Do non-competes hold up in court? Before you sign an agreement, you should consult an attorney and make sure you fully understand the agreement. If you have already signed, an attorney can help you understand if the non-compete will hold up in court in Virginia.
What is a Non-Compete Agreement?
A non-compete agreement is a contract or clause that restricts an employee from working for other competitors or starting a competing business for a period after leaving their current job. These agreements are meant to deter employees from using insider knowledge from one company to help a competing business gain a competitive advantage or using that information to start their own competitive business.
Enforcing Non-Compete Agreements
The enforceability of a non-compete agreement is dependent on a few key factors. These include:
- Duration: This typically ranges from 6 months to two years.
- Geographical Scope: This is determined by the specified regions or radius contained in the agreement.
- Industry Restrictions: This encompasses the constraints imposed on employees regarding their ability to work for a competing employer or establish a competing business.
Generally speaking, non-competes are considered legally binding in concept and can be enforced when an employee departs from a company. However, they are often written too broadly to be enforceable.
First is the reasonableness test. This test examines many facets of the agreement such as the presence of a protectable interest, the reasonableness of the clause, and the application of the ‘reasonable person.’
For example, a two-year period is typically considered reasonable by the courts. For reasonableness of the geographical area, courts usually look at the actual area where the employer is engaged, specified regions, or the radius mentioned in the agreement. They also consider any unique circumstances of the employer.
Courts use these factors to determine if the time frames or geographic scope are too narrow or too broad. There are also state laws to consider. These factors will determine if the non-compete will hold up in court and be enforced.
Challenging a Non-Compete Agreement in Virginia
Ideally, you should try to negotiate favorable terms before signing a non-compete. But if you find yourself needing to challenge an agreement, you need to hire a knowledgeable, experienced employment lawyer.
If you are in need of an attorney’s advice, please contact Cook, Craig, and Francuzenko today. Our firm has attorneys who specialize in a variety of practice areas. With over 100 years of combined experience, we are seasoned professionals ready to help you.
