Virginia recognizes and enforces non-compete and non-disclosure clauses contained in employment agreements under certain specific situations. The non-compete must be reasonable in geographical scope and length of time. To be valid and enforceable, the non-compete must be designed to protect a legitimate business interest of the employer and not unfairly restrict the ability of the employee to earn a living. Finally, the non-compete agreement must not violate public policy.
We receive calls from clients on a regular basis who tell us they have a non-compete restriction with their employer. However, when we inquire as to the nature of the non-compete we learn that the caller does not have an employment agreement and they are merely an “employee at will.” The non-compete language is contained in the Employee Handbook not an employment agreement.
Employees need to be aware that restrictions (non-compete, non-solicitation, non-disclosure) contained in an Employee Handbook may have no legal or binding effect on their rights after leaving their employment. Make sure your attorney knows the difference between restrictions in the Employee Handbook and an Employment Agreement.
Tuesday, January 22, 2008
Sunday, January 6, 2008
MONTANA SUPREME COURT SAYS NO TO NON-COMPETE
This doesn’t come from my home state of Virginia but I just couldn’t let this good decision pass without mention. The Montana Supreme Court ruled last week that an employee's noncompete contract cannot be enforced in the state. The court said that Montana law is tough on contracts which restrain trade (as is Virginia) such as noncompete agreements that restrict an employee's job opportunities after leaving the current employer.
The case arose from a former employee of Access Organics who was required to sign a noncompete agreement before leaving. A lower court issued a ruling that banned the employee from contacting any of the company's customers.
The Montana Supreme Court reversed the ruling and held the employee wasn't justly compensated for the restriction on future opportunities. This is a good decision! An employer cannot tell an employee as he/she heads out the door to sign a binding non-compete.
The case arose from a former employee of Access Organics who was required to sign a noncompete agreement before leaving. A lower court issued a ruling that banned the employee from contacting any of the company's customers.
The Montana Supreme Court reversed the ruling and held the employee wasn't justly compensated for the restriction on future opportunities. This is a good decision! An employer cannot tell an employee as he/she heads out the door to sign a binding non-compete.
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