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Non-Compete Agreements Are Generally Enforceable Under the Law

Business and Commercial Disputes By Harvey Binnall PLLC - 2018/06/15 at 12:15pm

Non-compete agreements have been the subject of controversy in recent decades, particularly in industries — such as the tech industry — where shorter periods of employment are common and freedom of movement between companies is expected.  In a number of states, new laws have been established that limit the enforcement of non-compete agreements and thereby circumscribe their original power.

As non-compete agreements strike at the heart of one’s ability to earn a living, they tend to be a frequent source of contract disputes, in the D.C. metro area and elsewhere.  As an employer, you may find that (unless your non-compete agreement is highly limited in scope) that you will have to pursue litigation against former employees in order to enforce the terms of the agreement.

The Law is Friendly to Non-Compete Agreements

In Virginia, Maryland and D.C.., non-compete agreements are generally enforceable (though strictly construed against employers).  While there have been legislative movements to restrict the enforcement of non-compete agreements, such initiatives have failed to gain significant traction among lawmakers.  Employers in the D.C. area are therefore broadly entitled to enter into non-compete agreements with their employees and prevent said employee from transitioning to a similar position with a different employer.

Courts Will Not Enforce Highly Restrictive Non-Compete Agreements

Non-compete agreements must still be drafted in such a way as to avoid excessive and unreasonable restrictions on the employee.  In order for a non-compete agreement to be deemed enforceable under the law, the following must be true: a) the restriction must not be greater than necessary to protect a legitimate business interest of the employer, and b) the employer’s need to restrict the activities of the employee must be greater than the employee’s hardship.

Further, a valid non-compete agreement must be certain in its terms and must be narrowly tailored for its intended restriction.  Vagueness may be fatal to the enforceability of an otherwise valid non-compete agreement — for example, if the non-compete agreement does not identify the specific restraint that it intends to impose on the employee, then the agreement will likely be deemed unenforceable.

Whether a restriction is seen as “excessive” — greater than required to protect your legitimate business interest — depends on the circumstances, but some restrictions are necessarily excessive per se.  For example, a restriction that prevents an employee from working for a competitor for the rest of their life (i.e., no time limit) will almost certainly be unenforceable under the law.

Contact a Skilled Alexandria Business Dispute Lawyer for Assistance

If you have entered into a non-compete agreement with an employee or agent who has subsequently breached that agreement, then you may be entitled to sue and recover damages, and in some cases, obtain an injunction against certain activities.  Still, while non-compete agreements are generally enforceable under the law, there are circumstances where the court may choose not to enforce the prohibition.

Here at Harvey & Binnall, PLLC, our team of attorneys boasts extensive experience representing clients in business disputes, including those that arise from the breach of a valid non-compete agreement.  These agreements are particularly vulnerable to dispute, as the defendant is likely to paint the prohibitions therein as excessively restrictive and therefore unenforceable by law.  We are well-equipped to successfully counter such assertions and secure enforcement of the non-compete agreement.

Call (703) 888-1943 or submit an online form today to speak to an experienced Alexandria business dispute lawyer here at Harvey & Binnall, PLLC.