Anyone who reads this blog knows my bias.
I hate non-competes in any shape or form! They unreasonably restrict the little guy’s right to earn a living and feed his/her family. Further, as experienced by the Commonwealth of Massachusetts, businesses are shooting themselves in the foot by requiring these restrictive agreements. You see…business innovation and growth require a competent, knowledgeable, but most importantly an experienced work force. If an employee has experience but cannot change jobs and better himself/herself by using that experience…innovation and growth suffer. This is the reason Massachusetts is losing high tech business to California because the Golden State does not enforce non-competes and Massachusetts does!
Want to know why your boss or employer wants you to sign the non-compete? Read Ray Silverstein’s (MSNBC) article to find out what it going on in the mind of the bad guys!
Monday, March 31, 2008
Tuesday, March 18, 2008
CASE REPORT: PERMANENT INJUCTIVE RELIEF
The U.S. District Court for the Eastern District of Virginia (Richmond) recently handed down an important decision in Western Insulation, LP v. Hal Moore and Melanie Moore (January 22, 2008). The case arose out of the defendants’ sale of an insulation business to the plaintiff. In connection with the sale, the defendants entered into a non-competition agreement with the plaintiff. Subsequent to the sale, the plaintiff filed suit alleging, among other things, the defendants violated the non-compete provision of the sale agreement and asked the court to award it damages and to permanently enjoin the defendants from further violations of the non-compete.
The decision is important in Virginia for a number of reasons but, for this article, we will discuss the plaintiff’s request for an order permanently enjoining and preventing the defendants from future violations of the non-compete.
In the opinion, Judge James Spencer stated that to obtain a permanent injunction in Virginia a party must show:
(1). it has suffered an irreparable injury;
(2). remedies available at law, such as monetary damages, are inadequate to compensate for that injury;
(3). that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and
(4). the public interest would not be disserved by a permanent injunction.
This is a difficult test for most plaintiffs to pass and Judge Spencer deemed the imposition of a permanent injunction too harsh and severe under the facts of the case. Ultimately, the court imposed a temporary injunction preventing the defendants from violating the non-compete for an additional term equal to the length of time the court determined the defendants had been in breach of the non-compete.
The decision is important in Virginia for a number of reasons but, for this article, we will discuss the plaintiff’s request for an order permanently enjoining and preventing the defendants from future violations of the non-compete.
In the opinion, Judge James Spencer stated that to obtain a permanent injunction in Virginia a party must show:
(1). it has suffered an irreparable injury;
(2). remedies available at law, such as monetary damages, are inadequate to compensate for that injury;
(3). that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and
(4). the public interest would not be disserved by a permanent injunction.
This is a difficult test for most plaintiffs to pass and Judge Spencer deemed the imposition of a permanent injunction too harsh and severe under the facts of the case. Ultimately, the court imposed a temporary injunction preventing the defendants from violating the non-compete for an additional term equal to the length of time the court determined the defendants had been in breach of the non-compete.
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