Opinion ID: 1027836
Heading Depth: 4
Heading Rank: 3

Heading: Is the restraint reasonable from the

Text: standpoint of a sound public policy? Non-competition covenants which pass these tests in the light of the facts of each case will be enforced in equity. Blue Ridge Anesthesia & Critical Care, Inc. v. Gidick, 389 S.E.2d 467, 470 (Va. 1990) (quoting Roanoke Eng’g Sales v. Rosenbaum, 290 S.E.2d 882, 884 (Va. 1982)). In other words, the Court must determine whether the non-competition clause or restraint is greater than necessary to protect DII’s interest or unreasonable in limiting Efird’s ability to obtain other suitable employment. See Blue Ridge Anesthesia & Critical Care, Inc., 389 S.E.2d at 470. Virginia law does not generally favor restrictive covenants because such covenants are a restraint on trade. See Grant v. Carotek, 737 F.2d 410, 411-412 (4th Cir. 1984). For this reason, restrictive covenants are strictly construed against the 28 employer. Grant, 737 F.2d at 412; accord Roanoke Eng’g Sales Co., 290 S.E.2d 882 (Va. 1982) (other citations omitted). Moreover, the employer bears the burden of proving that the restraint is reasonable under the circumstances of the case. Id. (citing, inter alia, Richardson v. Paxton Co., 127 S.E.2d 113 (Va. 1962)). In this case, Sentia attacks this provision of Efird’s contract as ambiguous and overbroad. Sentia’s chief criticism of the non-competition agreement is that the contract is vague regarding the business of the company. Indeed, the district court found the non-compete unenforceable on this basis. 23 Construing the non-compete clause against the employer, the district court determined that the clause was “broader than necessary” to protect DII’s legitimate business interests and “unduly restrictive of Efird’s efforts to pursue his livelihood.” (JA at 273) In evaluating the reasonableness of the restraint from the employer’s perspective, the first inquiry necessarily requires the court to consider the nature of the legitimate business 23 Based on the purported lack of evidence establishing that DII’s business was conducted worldwide, the district court also found the absence of a geographic limitation unreasonable. The district court likewise found the two-year time limitation unreasonable. Given our analysis, we need not discuss these issues. 29 interest at stake, namely, whether DII possessed trade secrets or other confidential and proprietary information. See Meissel v. Finley, 95 S.E.2d 186, 191 (Va. Ct. App. 1956) (“The possession of trade secrets and confidential information is an important consideration in testing the reasonableness of a restriction on competition.”)(citing Stoneman v. Wilson, 192 S.E. 816, 819 (Va. 1937)); But see Paramount Termite Control Co., Inc. v. Rector, 380 S.E.2d 922, 925 (Va. 1989) (“Although often used as a justification for non-competition agreements, it is not necessary that the employees actually had acquired or possessed specific information that could be legally defined as confidential or a trade secret, . . . .”)(internal quotations omitted). Here, the district court determined, in effect, that DII did not have any legitimate business interests worthy of protection. As a result, the district court’s analysis of the restrictive covenant was likely skewed by its conclusion that DII failed to demonstrate the existence of a trade secret. Each of Virginia’s tests for validity of a non-competition clause prompts a reasonableness inquiry in which the analysis would necessarily include consideration of the existence of a trade secret to be protected. More importantly, the competing interests of the employer and employee must be balanced by the court and then squared with public policy. As explained by the Supreme Court of Virginia, “[t]hese standards have been 30 developed over the years to strike a balance between an employee’s right to secure gainful employment and the employer’s legitimate interest in protection from competition by a former employee based on the employee’s ability to use information or other elements associated with the employee’s former employment.” Omniplex World Servs. Corp. v. U.S. Investigations Servs., Inc., 618 S.E.2d 340, 342 (Va. 2005) (citing Worrie v. Boze, 62 S.E.2d 876, 882 (1951)). For these reasons, we conclude that remand is also proper on this issue so that the requisite balancing and analysis may be conducted by the trial court.