Does a rose by any other name smell as sweet?
When it comes to non-compete agreements, the answer is yes, Mr. Shakespeare. Non-compete agreements come in lots of flavors, but whatever they are called, the result is generally some type of post-employment restriction on the employee’s ability to compete with their ex-employer.
So what exactly is a non-competition agreement?
In Virginia, non-competition agreements may be called lots of things: a non-compete contract; a no-hire agreement; a non-solicitation contract; a trade secret, confidentiality, and intellectual property agreement; or, a plan old non-competition agreement. Or, in many cases, the non-competition agreement may be none of these things at all, but simply certain non-compete provisions or “restrictive covenants” incorporated into a standard at-will employment contract.
Whatever a non-competition agreement is called, there are some common features across all versions of non-compete contracts:
- The employee cannot compete against the employer during his or her employment;
- The employee cannot compete against the employment after his or her employment ends, for a certain period of time, in a certain geographic location, doing certain activities.
If the non-competition agreement includes no-hire provisions, it may state:
- The employee cannot hire, or try to hire, his or her former colleagues at the employer in order to compete against the employer, for a certain period of time, in a certain geographic location, doing certain activities.
Finally, if the non-competition agreement includes non-solicitation provisions, it may state:
- The employee cannot solicit his former customers for products or services that compete with the employer, for a certain period of time and in a certain geographic location.
The key question for many Virginia employees is not what the non-competition agreement is called – and hopefully, this answers the question, What is a non competition agreement. Rather, Virginia law only allows non-compete contracts, however they are named, so long as the employee is not unduly restricted from earning a livelihood. The period of time, geographic restriction, and functional restriction cannot be unreasonably overbroad, or else the non-compete is unenforceable under Virginia and void as against public policy.
Do you need help reviewing a non-competition agreement? Contact a Virginia non compete lawyer for more information.