Source: https://www.employmentlawgroup.com/in-the-news/articles/strategies-defending-non-compete-litigation/
Timestamp: 2019-04-24 08:09:19+00:00

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II. Is the Restrictive Covenant Valid?
(3) the clarity and unambiguous nature of the noncompete.
After a few months of employment with Omniplex, the employee received a job offer for an administrative assistant position with another company where her duties would be limited to arranging travel, and obtaining visas and passports.7 Despite the obvious differences between the employee’s new duties and those performed in her former position, Omniplex filed suit against her to enforce the non-compete.
in activities that are “the same or similar” to those of the former employer.
While these examples provide guidance on what Virginia courts likely will consider reasonable, there is no hard and fast rule. Each case will turn on its own facts and the reasonableness of the restraint will, among other things, be determined by the position and seniority of the employee, the length of the employee’s service, the nature of the industry, and the length of time during which any trade secrets giving rise to enforcement of a non-compete are expected to remain economically valuable to the employer.
A non-compete may be unenforceable where it goes against public policy, including where the non-compete imposes anticompetitive restraints on trade,23 requires an employee to abandon the only occupation for which the employee is trained, or obliges an employee to relocate in order to be able to work. For example, in Wheeler v. Fredericksburg Orthopedic Assocs., Inc.,24 the covenant restricted a doctor in a sub-specialty medical practice from practicing medicine within a thirty-five mile radius of his former employer. The court invalidated the restrictive covenant, finding that Fredericksburg residents would suffer irreparable harm if the former employee was not allowed to practice medicine within a thirty-five mile radius of the city. In general, a Virginia court is likely to find a non-compete that restrains trade and defeats competition void as against public policy and thus unenforceable under Virginia law.
Where a former employer threatens to bring an action to enforce an invalid non-compete, consider striking first by filing a declaratory judgment action to declare the non-compete unenforceable. This strategy turns the table by forcing the employer to defend the Non-Compete Litigation — validity of the non-compete and puts the plaintiff in the driver’s seat. Prior to pursuing this strategy, however, it is important to evaluate potential counterclaims that the employer may bring once it is sued.
engaged in wrongful or inequitable conduct with respect to the matter in litigation. This defense is often raised where an employer unilaterally changes the terms and conditions of the employment agreement or breaches the employment agreement by refusing to pay an employee for owed wages and bonuses.26Other types of employer conduct that might constitute unclean hands include sexual harassment, racial discrimination, termination without cause, and retaliation against an employee who discloses information about the employer’s violation of a federal or state regulation.
While Virginia courts have not yet addressed a claim for tortious interference against a former employer, cases from other states hold that a former employer can be liable for tortious interference where a new or potential employer withdraws an offer of employment because the former employer, in bad faith, threatened to enforce a non-compete.
In Voorhees v. Guyan Mach. Co.,30 a West Virginia court recognized a claim for tortious interference where a former employee’s new employer terminated his employment after receiving threats that the former employer “would go to the highest court of the land to enforce [the non-compete],” and the employee was terminated by his new employer. The Voorhees Court concluded that the extent of competition between the former and new employer was so minimal that the former employer lacked a legitimate business interest warranting enforcement of the non-compete. The employee recovered both compensatory and punitive damages for the harm he suffered as a result of the employer’s improper threat to enforce an unenforceable non-compete.
Virginia law prevents courts from revising or “bluepenciling” overly broad portions of a non-compete to sever unenforceable provisions. Thus, if one provision is invalid, the entire non-compete is invalid and unenforceable as a matter of law. If an employer seeks to enforce a non-compete that is obviously void, an employee may move for sanctions against the employer and its attorney for bringing a frivolous suit.
In sum, an employee faced with a lawsuit to enforce a non-compete or faced with the threat of non-compete litigation has many options to challenge the enforceability of the non-compete, including the unclean hands defense. In addition, an improper attempt by an employer to enforce a non-compete can give rise to tort liability and sanctions. As a lawsuit to enforce a noncompete is typically accompanied by a motion for a preliminary injunction or a motion for a temporary restraining order, it is critical to quickly assess and implement options available to the employee to gain the upper hand in the litigation.
Tadena Simpson for her contributions to this article.
1 This article is intended only to provide basic information concerning non-compete litigation. It is not, nor is it intended to be, legal advice upon which you should rely or act.
2 Omniplex World Servs. Corp. v. United States Investigations Servs., Inc., 270 Va. 246, 249 (2005).
3 Simmons v. Miller, 261 Va. 561, 581 (2001) (holding that analysis of the three factors “requires consideration of the restriction in terms of function, geographic scope, and duration.”); See also Advanced Marine Enters., Inc. v. PRC, Inc., 256 Va. 106, 119 (1998) (finding that eight-month duration informed the evaluation of both the geographic scope and function components of a restrictive covenant).
4 Omniplex, 270 Va. at 250 (2005).
10 Motion Control Sys., Inc. v. East, 262 Va. 33, 36 (2001). See also Modern Env’t Inc. v. Stinnett, 263 Va. 491, 493-94 (2002).
13 Id. at 36, 38.
was unduly harsh and oppressive in curtailing the employee’s legitimate efforts to pursue her livelihood).
17 Roanoke Eng’g Sales Co. Inc. v. Rosenbaum, 223 Va. 548, 553 (1982).
18 See e.g., Meissel v. Finley, 198 Va. 577, 582 (1956) (affirming non-compete agreement that prohibited former partner from writing insurance or surety bonds for five years within 50-mile radius).
19 Omniplex, 270 Va. at 255.
359 (Fairfax County 2006) (non-compete agreement that had no geographical limitation was still enforceable because it allowed employee to continue to work in his field).
22 Simmons, 261 Va. at 581.
23 Omniplex, 270 Va. at 249 (concluding that “[b]ecause such restrictive covenants are disfavored restraints on trade… any ambiguities in the contract will be construed in favor of the employee.”).
24 Wheeler v. Fredericksburg Orthopedic Assoc., 44 Va. Cir. 399, 402 (1998).
25 Albert v. Albert, 38 Va. App. 284, 299 (2002) (citing Walker v. Henderson, 151 Va. 913, 927-28 (1928)).
provisions. Accordingly, employee was relieved of any obligations under the restrictive covenant).
27 Hilb, Rogal & Hamilton Co. of Richmond v. DePew, 247 Va. 240 (1994) (articulating the rule that a tort action exists against one who intentionally interferes with another’s contractual rights).

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