Because the law is constantly changing, we encourage employers to have their agreements regularly reviewed to ensure they are enforceable. In 2011, the Virginia Supreme Court declared a non-compete obligation too broad, identical to the one it had deemed appropriate for the same employer in 1989. Employees should be aware that if you qualify for a low salary under the law, you probably do not need to abide by your non-competition code (if it is completed after July 1, 2020) and you can challenge the agreement if necessary. And thank you. Many thanks to our intern Elizabeth Dreisbach (Boston University School of Law) and Erika Hahn for their extensive work in monitoring and summarizing the state of all current competition and trade secret laws, including these. A big thank you also to my former partner David Sanders (Foley & Larder), who also shared it with me. Low-wage workers must submit their application within two years of the date (1) of the signing of the non-compete obligation; (2) the low wage is aware of the non-competition obligation; (3) the employee resigns or is dismissed; or (4) the employer takes all necessary measures to enforce the non-compete obligation. Under the new legislation, courts can set aside anti-competitive non-compete obligations, order an injunction and award lost compensation, lump sum damages, and reasonable attorneys` fees and expenses to successful former employees. In addition, employers face civil penalties of up to $10,000 for each violation of the law. Limited activities/features. An employer must take care to prevent a single former employee from working for a competitor who is actually competing with his company. If done right, a company can prevent its sales manager from working in the same type of sales for a competitor in its area. However, the company probably can`t stop the employee from working in the competitor`s IT department.
Any attempt to prevent an employee from working for a competitor in “any capacity” is likely to be dismissed as inappropriate and too broad, regardless of the work the former employee actually does. D. A low-wage employee may bring a civil action in a court of competent jurisdiction against any former employer or other person who attempts to enforce an obligation not to compete with that employee in violation of this Section. An application under this Section shall be made within two years of the latter date (i) the date on which the obligation not to compete, (ii) the date on which the low-wage employee is released from the obligation not to compete, (iii) the date on which the employment relationship is terminated, or (iv) the date on which the employer takes action to enforce the non-compete obligation. The court has jurisdiction to set aside any obligation not to compete with a low-wage employee and to order all appropriate facilities, including ordering the conduct of a person or employer, ordering the payment of lump sum damages, and awarding lost compensation, damages, and reasonable attorneys` fees and expenses. No employer may dismiss, threaten or otherwise discriminate against or retaliate against a low-wage worker for bringing a civil action under this section. The Act defines the term “duty not to compete” broadly to include an “agreement or arrangement, including a provision of a contract of employment, between an employer and an employee that restricts, prohibits or otherwise restricts a person`s ability to compete with his or her former employer after the termination of the person`s employment relationship”. Therefore, the law has the potential to influence non-compete obligations in employment contracts, autonomous restrictive agreements and separation agreements presented at the end of the employment relationship. Geographic scope. Non-competition agreements between them must also have a limited geographical scope.
In general, employers can only restrict competition in the region where they operate. For example, if 90% of a business`s operations are within 25 miles of the head office and the employer requires a 50-mile non-compete clause at the time of termination, expect it to be hit by the courts. An employer cannot object to an employee`s breach of a non-compete obligation without providing proof of the damage. Actual (monetary) harm can be proven by referring to cases of “successful competition” – competition by a former employee that leads to injury. If an employer has proven a breach of a valid non-compete obligation and has demonstrated actual breach, it may be able to assert claims for damages as set out in the agreement, which often contains flat-rate (double) compensation provisions. It is imperative for employees and employers to consult with an experienced competition law attorney in Virginia, as there is no single formula for applicability. A non-compete obligation may be appropriate (and therefore enforceable) in one context, but inappropriate in another. The investigation is factual and every situation is different.
In order to maximize the likelihood of applicability, employers should consult a lawyer to obtain a non-compete obligation for their particular business. The company also needs a lawyer when it comes to enforcing the agreement against a former employee who may need to be reminded of their obligations or against whom an injunction is required. If you are an employee who wants to join a competitor, you need to know if your non-compete obligation is enforceable and you may want to seek an immediate declaratory claim in court. In both cases, berlikLaw founder Lee Berlik knows how to position non-compete obligations for maximum benefit of the process. In order to assert a non-compete obligation before a court, it is up to the employer to prove that it is valid. Courts consider a number of factors when assessing the legality of a non-compete clause, including Virginia may be for lovers, but it no longer likes non-compete obligations. As of July 1, 2020, employers with a “low-wage employee” can no longer “contract, enforce or threaten to enforce” a non-compete obligation. As previously stated, this law is just one of many new labour laws enacted during the 2020 legislature. When interpreting a non-compete obligation, the employee enjoys any advantage of doubt, so that the language of the agreement is decisive. If a court finds that a provision of a non-compete obligation is unenforceable, it will not rewrite or repeal that provision. Instead, the entire agreement becomes invalid. This result would compromise the validity of any similar agreement a company might have with its other employees.
One more reason not to go beyond the limits when it comes to writing. If you work in the Commonwealth of Virginia and have signed a contract with your employer that includes a non-compete clause, there may be legal consequences if you violate that agreement. You need to know how this may affect you in case you are fired or decide to change jobs. The law firm Erlich can help you assess and navigate these situations, whether you`re working for a defense contractor in Fairfax, a nonprofit in Alexandria, or a tech startup in Tyson`s Corner. On April 9, 2020, Governor Ralph Northam signed House Bill (HB) 330, Virginia`s first law prohibiting non-show-off agreements against “low-wage employees.” As of July 1, 2020, Virginia employers cannot commit, enforce, or threaten not to compete with an employee earning less than the average annual weekly salary in the Commonwealth that the Virginia Department of Labor and Industry has confirmed, which is currently $1,204 per week (or $62,608 per year). .