Do I Have to Sign a Non Compete Agreement

In Virginia, you do not have to sign a non-compete agreement.

However, Virginia law allows an employer to make signing a non-compete agreement a condition of continued employment with a company. In other words, your boss cannot make you sign a non-compete contract – but they can make your job conditional on signing the agreement, and if you don’t, they can let you go.

It’s a Catch-22 for Virginia employees: either sign the non-compete, and keep your job; or, refuse to sign the non-compete, and risk losing your job.

So what should you do when presented with a non-compete to sign at work?

Here’s a list of four tips for employees who are considering whether to sign a non-compete contract:

Tip #1 – Take your time.

Too often, non-compete contracts are presented to employees during the hiring process along with other, boilerplate documents. You get a stack of paper from the HR department before your first day: tax forms, health insurance applications, the company handbook, and oh by the way, here’s a non-compete contract.

“Just sign it,” you might be thinking. It’s part of the stack of paper. It’s boilerplate. Perhaps you’re supposed to sign it without any further thought or negotiation?

It is absolutely the wrong approach to rush to sign a non-compete agreement. Sure, go ahead and fill out all the other forms that the HR department put in front of you. But tell them that you need more time to review the non-compete agreement – after all, the terms and conditions in a non-compete can have lasting, sometimes harsh effects on your ability to earn a living in Virginia for years to come. You should should at least take 72 hours to review the non-compete, make sure you understand it, and consider its terms.

Better yet? Contact a Virginia non-compete lawyer to review your contract before you sign it. Which brings us to the next tip…

Tip #2 – Talk to a Lawyer.

I know what you are thinking. This guy’s a lawyer, and he’s telling me to go hire a lawyer as one of his “tips.” How self-serving, right? Here’s my response: maybe you don’t need a lawyer.

That’s right, a lawyer is telling you that you might not have to hire a lawyer. If this is a short-term job, you are comfortable with the non-compete terms, and you think you’ll have no trouble abiding by them, switching careers, etc., then by all means proceed with relying on your own judgment with the non-compete.

Not everyone needs a lawyer.

But if you plan to stay in this particular industry for a long time, it is probably worth the small investment of hiring  a lawyer to briefly review your contract, give you advice on whether it is enforceable, and help you understand Virginia non-compete law, all before you sign.

Engineers, salespersons, financial advisors, doctors, and generally anyone with a portable book of business should consider talking to a lawyer before signing a non-compete. It is a worthwhile investment, so that you can come up with a strategy on how to deal with the non-compete before you sign – and in the likely event that you move onto another job at another company at some point in the future. Start planning now. It’s worth it.

Tip #3 – Negotiate.

If you want to limit the non-compete contract’s terms, now is the time to speak up. Not years down the road, when you have already left for a competitor, and you are contemplating disregarding the non-compete to keep your book of business. The best approach is to be up front and straightforward with your employer to limit as much as possible the non-compete agreement’s terms.

Keep in mind that you will have a tough time avoid compliance with a non-compete if you successfully bargain down the terms in the agreement. A court will say, “You had an opportunity to negotiate the terms of the non-compete, you got what you wanted, and now you have to abide by it.”

That’s why it’s strongly recommended to follow tip #2 if you can see yourself staying in the industry if you ever move on. If you are going to negotiate the non-compete, and you should, then consider speaking behind the scenes with a lawyer who can help advise you what the law will allow – and what Virginia law will consider unenforceable. A good Virginia non-compete lawyer can develop a plan of action for negotiations.

The non-compete agreement is basically made up of three parts under Virginia law: duration of time; geographic scope; and functional restriction. Each of those building blocks may be negotiable, depending on the employer. Ask for one year, rather than two years. Or, 10 miles, rather than 50 miles. Better yet, ask for paid leave during the post-employment non-competition period. In other words, see if your employer will agree in advance to an amount of severance, called “garden leave,” to pay you to sit on the sidelines and not compete for a period of time. Garden leave is very popular in the United Kingdom. Perhaps your Virginia employer will extend the same benefit to you.

A good negotiation should be conducted at arm’s length, in writing, and before you start employment. That’s why steps one and two are helpful. Allow enough time to negotiate, and if possible, involve a lawyer behind the scenes.

But let’s say you come to an agreement. The next step is critical to your future…

Tip #4 – Keep a Copy.

If you have decided to sign the non-compete agreement after taking time to consider it, talking to a lawyer, and negotiating its terms, you must keep a copy.

When you decide to move on from your employer, whenever that might be in the future, you will want to have a copy of your non-compete in your personal records so that you can carefully conduct a job search. The last thing you want is to plan your exist without the benefit of referencing the contracts that will shape your next career opportunity. You would be surprised – actually, maybe you wouldn’t be surprised – how often employees forget that they signed a non-compete, only to accept a job that violates it and results in a messy legal situation.

Do not get caught accepting a job in the future without taking a look at your non-compete in advance. When you sign the non-compete, make sure you keep a signed copy for your records.