Non-Compete Agreement Barring Work for Competitor “In Any Capacity Whatsoever” Unenforceable in Virginia
Finding a non-compete provision in an employment agreement overbroad on its face and therefore unenforceable, the Supreme Court of Virginia has affirmed dismissal of an employer’s breach of contract claim against a former employee. Home Paramount Pest Control Cos., Inc. v. Shaffer, 2011 Va. LEXIS 222 (Va. Nov. 4, 2011). While acknowledging that it was invalidating a provision that was identical to one it had enforced for the same employer more than 20 years earlier, the Court said the Virginia law on non-competes has evolved since then and overruled conflicting portions of its 1989 opinion.
Virginia Supreme Court Further Narrows Non-Compete Covenant Enforceability
In Home Paramount Pest Control Cos. v. Shaffer, No. 101837, 2011 Va. LEXIS 222 (Nov. 4, 2011), the Virginia Supreme Court ruled that a covenant not to compete was overbroad and unenforceable, even though it was identical to a covenant the court had upheld 22 years earlier in Paramount Termite Control Co. v. Rector, 238 Va. 171 (1989). Acknowledging this, the court expressly overruled its holding in Paramount Termite.
Virginia Supreme Court Reverses 22-Year-Old Precedent in Non-Compete Case
A recent decision by the Virginia Supreme Court makes clear that when it comes to the use and enforcement of noncompetition agreements under Virginia law, “one size” does not “fit all” and that employers must utilize narrowly tailored agreements that reflect a position-specific, functional analysis in order for such agreements to be deemed enforceable. In Home Paramount Pest Control Companies, Inc. v. Shaffer, No. 101837, 2011 Va. LEXIS 222 (2011), the Virginia Supreme Court upheld the trial court’s decision to strike down the noncompetition clause in an employment agreement that the company entered into with one of its employees, who in 2009, resigned his position and soon went to work for a competitor. Through this decision, the Supreme Court reversed its own, 22-year-old precedent, through which it had held that the precise language at issue within a noncompetition agreement was enforceable.
Virginia Supreme Court Refuses to Relax Standard for Tortious Interference with Employment Contract
An at-will employee must show a customer used “improper methods” beyond merely “actions solely motivated by spite, ill will and malice” to prove her employer’s primary customer tortiously interfered with her employment contract, the Virginia Supreme Court has ruled. The Court reversed a jury verdict awarding $900,000 in damages to a doctor for tortious interference, finding the pressure inherent in her employer’s relationship with its customer and primary source of revenue cannot rise to the level of “improper methods” needed for an at-will employee to show that the third party tortiously interfered with her employment contract.
Virginia's Mini-COBRA and the Federal Stimulus Act Impact Employers.
As most employers are now aware, the American Recovery and Reinvestment Act of 2009 (Act) amended the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) to, among other things, provide a premium subsidy for certain individuals who lose health coverage in connection with an involuntary termination of employment. The Act has affected every employer that sponsors a group health plan for employees and has terminated or laid off an employee on or after September 1, 2008. Employers have had to act quickly to implement new notice requirements, including notification to former employees and adjustment of payroll tax administration to administer the temporary federal subsidy of COBRA premiums.
New Virginia Statute Grants Leave to Employee Victims of Crimes.
A new Virginia statute aiding employees who have been victims of a crime requires their employers to grant them leave from work to be present at any criminal proceedings in certain cases. The law, which took effect July 1, 2007, however, may have a much greater impact than most employers anticipate. The expansive definitions used under the statute augur broad coverage and a likely impact on employee staffing.
Virginia Enacts New Law Allowing Crime Victims Time Off From Work.
Virginia enacted a new law on March 15, 2007, that requires employers to allow an employee who was the victim of a crime to leave work to be present at any criminal proceedings relating to the crime.
Virginia Day of Rest Law Is Repealed.
Effective July 1, 2005, Virginia has repealed its Day of Rest law, which had required all employers to provide all employees with one 24-hour rest period each week and allowed non-managerial employees in many industries to chose Saturday or Sunday as their day of rest.
How Not to Hire Employees From a Competitor.
A major retailer recently learned the hard way how not to hire a strong-performing employee from a competitor. In a recent decision from a Virginia Circuit Court, James, Ltd. v. Saks Fifth Avenue, Inc., et al., Saks was hit with a $1.6 million judgment for its actions when it hired a sales employee directly from a competitor, disregarding the employee's non-compete obligation.
Inadvertent Legislative Action Stirs Up Virginia's Day of Rest Law.
In April 2004, the Virginia General Assembly unintentionally amended Virginia's Day of Rest Law to remove the exemptions for certain employers. On July 13 the General Assembly fixed its mistake and restored the exemptions, but not before CNN and other media outlets gave it significant attention.
