Court Opinion

ID: 9391009
Source: CourtListenerOpinion
Date Created: 2023-04-28 21:01:58.570769+00
Date Added: 2024-06-11T17:18:38.782932
License: Public Domain

USCA4 Appeal: 21-2182     Doc: 41            Filed: 04/27/2023   Pg: 1 of 25

                                               PUBLISHED

                              UNITED STATES COURT OF APPEALS
                                  FOR THE FOURTH CIRCUIT

                                                No. 21-2182

        ADNET, INC.,

                    Plaintiff – Appellant,

            v.

        ROHIT SONI; LAURA BARR; JASON LAIRD,

                    Defendants – Appellees.

        Appeal from the United States District Court for the Eastern District of Virginia, at
        Alexandria. Michael Stefan Nachmanoff, District Judge. (1:21-cv-00130-MSN)

        Argued: January 26, 2023                                         Decided: April 27, 2023

        Before WILKINSON, AGEE and WYNN, Circuit Judges.

        Reversed in part, vacated in part, and remanded by published opinion. Judge Agee wrote
        the opinion, in which Judge Wilkinson and Judge Wynn joined. Judge Wilkinson wrote a
        concurring opinion.

        ARGUED: James Yarnell Boland, VENABLE LLP, Tysons Corner, Virginia, for
        Appellant. Palak Vinod Patel, JAYARAM LAW, Chicago, Illinois, for Appellees. ON
        BRIEF: Nicholas M. DePalma, Caleb E. McCallum, VENABLE LLP, Tysons Corner,
        Virginia, for Appellant. Vivek Jayaram, Elizabeth Austermuehle, Zahreen Ghaznavi,
        Michael Nosanchuk, JAYARAM LAW, Chicago, Illinois, for Appellees.
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        AGEE, Circuit Judge:

              While working for Adnet, Inc. (“Adnet”), Rohit Soni, Laura Barr, and Jason Laird

        (collectively, “Defendants”) learned of a subcontract that Adnet was attempting to win.

        Thereafter, Defendants, through their own company, submitted a bid for that same

        subcontract. After Defendants won the subcontract, Adnet brought claims against them

        for breach of the duty of loyalty, tortious interference with a business relationship, and

        business conspiracy. The district court granted Defendants’ motion for summary

        judgment, concluding that Defendants did not compete against Adnet, that Adnet did not

        have a business expectancy in the subcontract, and that, without proof of an underlying

        tort, there was no business conspiracy. Adnet appeals. For the following reasons, we

        reverse in part and vacate in part the district court’s grant of summary judgment and

        remand for further proceedings.

                                                    I.

              In August 2016, the Army awarded Adnet a contract to develop certain computer

        software. Adnet hired Soni and Barr as employees and Laird as an independent contractor

        to work on that software. Defendants were not subject to any restrictive covenants. On

        October 23, 2018, while employed by Adnet, Defendants incorporated their own

        company, RoLaJa, LLC (“RoLaJa”).

              Adnet’s contract with the Army was set to expire, with no option to renew, on

        August 31, 2020. After that date, the Army planned to transition the software-

        development work to General Dynamics Information Technology (“GDIT”). The Army

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        was not allowed to direct GDIT on how to meet the deliverables required for the contract,

        but informed GDIT that four qualified individuals were necessary to perform the software

        work and that Adnet was the incumbent currently performing the work.

              On June 12, 2020, GDIT contacted Adnet to schedule a meeting to discuss

        “potential teaming” on the new contract. J.A. 68. After the meeting, GDIT’s Program

        Senior Director, Karen Knickerbocker, emailed Adnet, stating that she “definitely s[aw]

        the benefit of having Adnet as part of [GDIT’s] team going forward” and planned to

        initiate “the process” with GDIT’s subcontracts manager. 1 J.A. 407. She ended her email,

        “I look forward to working with you and having you part of the team.” J.A. 407.

              As requested by GDIT, Adnet then submitted a rough order of magnitude

        (“ROM”) to GDIT, providing Adnet’s initial pricing estimate for the subcontracting

        work. GDIT included Adnet’s pricing estimate in its proposed contract to the Army,

        which the Army approved. At some point thereafter, Adnet’s CEO informed its

        employees, including Defendants, about the subcontract.

              On June 23, 2020, Laird sent an unsolicited email to Knickerbocker on behalf of

        RoLaJa to inform her of RoLaJa’s interest in the subcontract. About a week later, Laird

        and Knickerbocker held a call to discuss RoLaJa’s ability to perform under the

        subcontract, and Laird submitted a capability statement to GDIT. Adnet was unaware that

              1
                Although the email did not define “the process,” the inference from context is
        that Knickerbocker was referring to starting the process of awarding Adnet the
        subcontract. See J.A. 407.

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        Defendants reached out to GDIT or that GDIT was considering other potential

        subcontractors.

                 On July 6, 2020, during further pricing discussions with GDIT, Adnet informed

        GDIT that it maintained a “demo lab” for clients at an annual cost of $52,000. J.A. 405.

        Adnet proposed that GDIT provide at least half the cost annually as part of its subcontract

        award.

                 The next day, Laird held a second call with GDIT to again discuss RoLaJa’s

        capabilities. GDIT determined that RoLaJa was qualified to perform the work required by

        the subcontract and it was interested in RoLaJa as a subcontractor—partly due to

        Defendants’ work on the software at Adnet. Then, on July 13, 2020, RoLaJa submitted a

        ROM to GDIT at GDIT’s request. Later that day, Knickerbocker reached out to ask Barr

        to confirm that RoLaJa’s rates were fully burdened, meaning that they included all

        overhead, general, and administrative costs. Barr confirmed that they were. Laird texted

        Barr that this was “a really good sign[.] [GDIT] thinks [our rates] are low.” J.A. 436. He

        also stated that GDIT “must already have Adnet[’s] rates [a]nd we are way lower.” J.A.

        436.

                 On July 23, 2020, GDIT decided to compete the subcontract—meaning that GDIT

        switched from a sole-source negotiation, where they only considered one company’s bid,

        to a competitive process, in which multiple companies would be allowed to bid for the

        subcontract. GDIT’s subcontracts manager, Vicki Kordell, who handled the subcontract

        at issue, testified that GDIT generally did not compete subcontracts of this type but when

        it had two qualified companies able to perform the work equally well, it was required to

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        do so. In her more than ten years’ experience at GDIT, Kordell had never before

        competed a subcontract.

              At depositions, Knickerbocker explained that GDIT decided to compete the

        contract because:

              We were really concerned about the communications with [Adnet’s CEO]
              and the rates and some of the information we received from Adnet that
              concerned us with what we perceived as over-charging the Government for
              work on their existing contract and the impact of continuing to over-charge
              the Government, and so we wanted to give a formal opportunity to compete
              the requirement. And also, we were concerned about the email . . . kind of
              pushing for us to provide support to their facility. And then we also
              discussed, obviously, we also discussed the situation around RoLaJa, but
              [sic] that it was an existing business that we could afford an opportunity
              to[.]

        J.A. 187.

              On August 6, 2020, GDIT issued a “competitive” request for proposal (RFP) for

        the subcontract to Adnet and RoLaJa and requested proposals by August 12, 2020. 2 J.A.

        449. As part of the proposals, GDIT required resumes of the individuals who would be

        working on the software. The instructions explained that the proposals’ prices would be

        “evaluated against other submissions.” J.A. 455.

               On August 11, 2020, RoLaJa submitted a proposal to GDIT. 3 On August 12,

        2020, Adnet did the same but failed to provide resumes. On August 13, 2020, GDIT

              2
                GDIT also issued an RFP to a company called C2i, which did not submit a
        proposal.
              3
               Notably, on August 10, 2020, Soni texted Barr and Laird that he was taking off
        work because he “did not want [Adnet’s CEO] to pull [him] into contract work [for]
        GDIT.” J.A. 456. Barr responded “L[aughing ]m[y ]a[ss ]o[ff].” J.A. 456.

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        awarded RoLaJa the subcontract and informed Adnet that its proposal was not selected

        because it was “noncompliant” for failing to provide resumes. J.A. 80. GDIT refused to

        accept an amended proposal from Adnet because all proposals were due on August 12,

        2020, and Adnet missed the deadline. Adnet terminated Defendants’ employment the

        next day.

               In January 2021, Adnet brought an action against Defendants, alleging three

        Virginia state-law claims. 4 It asserted that Soni and Barr breached their duty of loyalty to

        Adnet and that all Defendants tortiously interfered with Adnet’s business relationship and

        committed business conspiracy. Thereafter, Adnet and Defendants both moved for

        summary judgment on all counts.

               The district court denied Adnet’s motion and granted Defendants’ motion in its

        entirety. See Adnet, Inc. v. Soni, No. 1-21-cv-00130-MSN, 2021 WL 4243424, at *5

        (E.D. Va. Sept. 17, 2021). It reasoned that Adnet could not demonstrate a breach of the

        duty of loyalty because Adnet had no existing relationship with GDIT and, even if it did,

        Defendants were merely preparing to compete after their employment with Adnet

        ended—conduct that does not amount to a breach of the duty of loyalty. The district court

        then dismissed Adnet’s tortious interference claim because it found no evidence of a

        valid contractual relationship or business expectancy with GDIT. Finally, without

               4
                Adnet originally brought this action in Virginia circuit court but Defendants
        removed it to federal district court. There is diversity jurisdiction over the parties because
        Adnet is a Virginia corporation, Defendants are Maryland citizens, and the amount in
        controversy exceeds $75,000. See 28 U.S.C. § 1332.

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        evidence of an underlying predicate tort, it determined that Adnet could not prove the

        necessary elements of a business conspiracy claim.

               Adnet timely appealed and challenges each of the district court’s rulings. First, it

        argues that the district court erroneously granted summary judgment on its breach of the

        duty of loyalty claim because it both misapplied the relevant law and mistakenly added

        an element to the claim. Had the district court applied the correct legal principles, Adnet

        contends that it would have concluded that there is sufficient evidence of a breach of the

        duty of loyalty such that granting summary judgment was inappropriate. Second, as to the

        tortious interference claim, Adnet contends that it provided sufficient evidence of

        probable future economic benefit from the subcontract that it would have realized absent

        Defendants’ intentional misconduct. Third, because Adnet posits that there is evidence of

        both a breach of the duty of loyalty and tortious interference with a business relationship,

        it contends the district court erred by granting Defendants summary judgment on its

        conspiracy claim as well. We address each argument in turn. 5

                                                     II.

               We review the district court’s grant of summary judgment de novo. Belmora LLC

        v. Bayer Consumer Care AG, 987 F.3d 284, 291 (4th Cir. 2021). “Summary judgment is

        appropriate when there is no genuine issue of material fact and the moving party is

        entitled to judgment as a matter of law.” Id. (citation omitted). Where the district court

               5
                   We have jurisdiction over the appeal under 28 U.S.C. § 1291.

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        disposes of cross-motions for summary judgment, we consider each motion separately,

        resolving all factual disputes in the light most favorable to the party opposing that

        motion. Id.

               Because Adnet’s claims arise under Virginia law, we must apply the applicable

        state law and determine how the Supreme Court of Virginia would decide this case.

        Whitmire v. S. Farm Bureau Life Ins. Co., 52 F.4th 153, 157 (4th Cir. 2022).

                                                    III.

               Adnet first argues that the district court made two significant legal errors in

        determining that Defendants did not breach their duty of loyalty: (1) the district court

        incorrectly limited the duty of loyalty to only three situations, and (2) it inaccurately

        required Adnet to prove it had an objective business expectancy in the subcontract as part

        of its claim. As a consequence, Adnet argues that these mistakes led the district court to

        erroneously conclude that Adnet failed to provide sufficient evidence that Defendants

        breached their duty of loyalty. 6 We agree and address these arguments seriatim.

                                                     A.

               The district court erred by limiting the circumstances in which a breach of the duty

        of loyalty can occur. In Virginia, to demonstrate a breach of a fiduciary duty, the plaintiff

        must show: (1) a fiduciary duty; (2) breach; and (3) damages resulting from the breach.

        Carstensen v. Chrisland Corp., 442 S.E.2d 660, 666 (Va. 1994). An employee “owes a

               6
                Because Adnet only brought this claim against Soni and Barr, “Defendants”
        throughout Section III refers only to them and does not include Laird.

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        fiduciary duty of loyalty to his employer during his employment” in Virginia. Williams v.

        Dominion Tech. Partners, L.L.C., 576 S.E.2d 752, 757 (Va. 2003). “Subsumed within

        this general duty of loyalty is the more specific duty that the employee not compete with

        his employer during his employment.” Id.

              In Williams, the Virginia Supreme Court noted three circumstances in which an

        employee breaches his duty of loyalty: when he misappropriates trade secrets, misuses

        confidential information, or solicits an employer’s clients or employees before his

        employment ends. Id. at 758. However, the court specifically explained that these

        circumstances are simply examples of situations that “clearly constitute a breach of the

        duty of loyalty” and are “by no means exhaustive.” Id. (emphasis added). Instead, a

        plaintiff can show a breach through other circumstances on a “case by case” basis. Id.

              Purporting to apply Williams, the district court stated that the inquiry before it was

        “narrow” “because Adnet does not allege misappropriation of trade secrets or the misuse

        of confidential information.” Adnet, 2021 WL 4243424, at *5. The district court then

        stated that “the only question,” therefore, was “whether defendants solicited plaintiff’s

        clients or other employees prior to their own termination of employment.” Id. (emphasis

        added).

              But Williams in no way limited the circumstances in which a breach of the duty of

        loyalty can occur. As noted, the Virginia Supreme Court explicitly stated the opposite—

        that the listed circumstances in Williams were merely examples of when a breach could

        occur. The district court, therefore, erred by requiring Adnet to fall into one of those

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        delineated examples in order to succeed on its breach of the duty of loyalty claim. As a

        consequence, this error alone warrants remand to the district court.

                                                    B.

               In addition to erroneously limiting the circumstances in which a breach of the duty

        of loyalty can occur, the district court also mistakenly added an element to this claim.

        The district court held that Adnet could not demonstrate a breach of the duty of loyalty

        because it did not have an objective business expectancy in GDIT’s subcontract.

        However, whether Adnet had such an expectancy is irrelevant because there is no

        objective business expectancy element for a breach of loyalty claim in Virginia.

               For its incorrect proposition, the district court again relied on Williams, but that

        reliance was misplaced. There, Williams worked for Dominion Technology Partners,

        LLC (“Dominion”) as an at-will hourly employee. 576 S.E.2d at 754. Dominion was an

        employment firm specializing in recruiting and placing qualified computer consultants

        with various companies. Id. at 753. It contracted with a company called ACSYS to place

        Williams at Stihl, where he provided computer contract work on a month-to-month basis.

        Id. at 754.

               After working at Stihl through Dominion for some time, Williams informed an

        ACSYS employee that Dominion had experienced a change in management, and

        Williams wanted to end his employment with Dominion due to personality conflicts with

        that management. Id. at 755. Williams knew through his employment with Stihl that it

        would need someone to work on a new software update and Williams wanted to continue

        working there, but not through Dominion. Id. After determining that neither of their

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        contracts prohibited it, ACSYS agreed to hire Williams and facilitate his placement at

        Stihl. Id. at 755–56. Williams provided Dominion his required thirty days’ notice,

        completed all contractual obligations, and then quit. Id. Dominion inquired with ACSYS

        about filling Williams’ position with someone else, but ACSYS indicated that there was

        no opportunity for them to do so. Id. at 756. ACSYS thereafter employed Williams, and

        he continued to work at Stihl. Id.

               Dominion brought an action against Williams, alleging a breach of the duty of

        loyalty, tortious interference with a business relationship, and business conspiracy. Id.

        The Virginia Supreme Court rejected Dominion’s claims without addressing each one

        separately, reasoning that the claims were interrelated. Id. at 757. The court explained

        that “Williams had the right to make the necessary arrangements to resign from his

        employment with Dominion in such a way as to take advantage of a higher level of

        compensation if his services at Stihl were needed beyond the month-to-month

        arrangement then in place, so long as these arrangements were not disloyal or unfair to

        Dominion.” Id. at 758. And, as there was no contractual bar to their actions, Williams’

        decision to safeguard his own interests was not improper. This was especially so because

        Dominion’s relationship with ACSYS “provided it with nothing more than ‘a subjective

        belief or hope that the business relationship[s] would continue and merely a possibility

        that future economic benefit would accrue to it.’” Id. (alteration in original) (citing Com.

        Bus. Sys., Inc. v. Halifax Corp., 484 S.E.2d 892, 898 (Va. 1997)).

               The district court heavily relied on this last quote to support its conclusion that

        Adnet could not prove a breach of the duty of loyalty without having an objective

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        business expectancy in the GDIT subcontract. But this reliance ignores the context and

        claim in which the statement was written. As noted, the Williams court considered

        Dominion’s breach of the duty of loyalty and tortious interference claims within the same

        discussion, but only a claim for tortious interference with a business relationship requires

        the plaintiff to demonstrate “the existence of a business relationship or expectancy, with a

        probability of future economic benefit to [the] plaintiff.” Id. at 757 (citation omitted).

        Thus, the court’s “possibility that future economic benefit would accrue” discussion

        related to Dominion’s tortious interference claim, not its breach of the duty of loyalty

        claim. Id. at 758 (citation omitted). No Virginia case provides to the contrary.

               In fact, the case on which the Williams court relied for its statement regarding

        Dominion’s subjective belief or hope that a future benefit would accrue, Commercial

        Business Systems, Inc. v. Halifax Corp., involved only a claim for tortious interference

        with a business relationship. See 484 S.E.2d 892, 896 (Va. 1997). In this context it is

        clear that the Williams court did not add an element to a breach of the duty of loyalty

        claim; it merely failed to separate its discussion of distinct claims. The district court erred

        by interpreting it in any other way and requiring Adnet to prove an objective business

        expectancy as an element of its breach of the duty of loyalty claim.

                                                      C.

               Applying the correct legal principles, there is sufficient evidence that Defendants

        breached their duty of loyalty to Adnet such that a jury could find for Adnet.

        Accordingly, summary judgment to Defendants was inappropriate.

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               As noted, an employee cannot compete with his employer during his employment.

        Although this prohibition appears simple enough, what exactly constitutes competition is

        more complex. Undoubtedly, without a restriction specifying otherwise, “an employee

        has the right to make arrangements during his employment to compete with his employer

        after resigning his post.” Williams, 576 S.E.2d at 757. “He is not, however, entitled to

        solicit customers for such rival business before the end of his employment nor can he

        properly do other similar acts in direct competition with the employer’s business.”

        Restatement (Second) of Agency § 393 (Am. Law. Inst. 2023). 7 Finding the line between

        preparing for termination and direct competition requires balancing the desire for a

        competitive marketplace and “the importance of the integrity and fairness” in the

        employer-employee relationship. Williams, 576 S.E.2d at 757 (citation omitted).

               Although the point at which an employee crosses into direct competition is not

        always precise, there is competent evidence that Defendants traversed that line here. To

        argue to the contrary, Defendants rely on Williams, discussed above. But, once more,

        their reliance on Williams falls short.

               Defendants’ competition with Adnet was more direct than the conduct involved in

        Williams. After learning of the new subcontract through their employment, 8 Defendants

               7
                 The Virginia Supreme Court consistently relies on the Restatement of Agency.
        See, e.g., Hilb, Rogal & Hamilton Co. of Richmond v. DePew, 440 S.E.2d 918, 923 (Va.
        1994).
               8
                 Defendants assert that they learned about the subcontract on their own but there
        is no record evidence to support this contention. Not only do Defendants fail to provide
        evidence of where else they could have learned this confidential information, but their
        (Continued)
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        reached out unsolicited to GDIT and offered to perform the same services they knew

        Adnet was offering to perform. 9 By reaching out to and informing GDIT that Defendants

        could perform the work, they first caused GDIT to compete the subcontract. See infra

        Section IV. Then, by submitting the competitive proposal to GDIT, Defendants competed

        against Adnet in the most direct sense of the word. See Competition, Black’s Law

        Dictionary (11th ed. 2019) (“[T]he effort or action of two or more commercial interests to

        obtain the same business from third parties.”). Defendants submitted their bid knowing

        that GDIT would compare its proposal to Adnet’s and choose which company to award

        the subcontract. And Defendants acted in this manner while under a duty of loyalty to

        Adnet. 10

        position is belied by Adnet’s CEO’s testimony that he told the Defendants about the
        subcontract. Taken in the light most favorable to Adnet, the Court must assume at this
        stage that Defendants learned of the contract through their employment with Adnet such
        that there is at least a genuine dispute of material fact.
               9
                 Defendants also contend that they did not know that Adnet was competing for
        the subcontract. Again, substantial evidence contradicts their contention. Specifically,
        two sets of text messages demonstrate Defendants’ knowledge. First, Defendants texted
        each other when GDIT asked Barr if RoLaJa’s rates were burdened. Laird stated that
        GDIT “must already have Adnet[’s] rates [a]nd we are way lower.” J.A. 436. Second,
        Soni informed Barr and Laird that he was skipping work one day to avoid having to work
        on “contract work [for] GDIT.” J.A. 456. Thus, for purposes of summary judgment—
        where we must construe the evidence in favor of Adnet—Defendants knew Adnet was
        competing for the subcontract.
               10
                  And despite Defendants’ argument to the contrary, their reaching out to GDIT
        after learning of the opportunity through Adnet and submitting the competing proposal
        cannot be considered preparing to compete after employment. Although the work would
        not begin until after their termination, the competition was winning the subcontract—
        which occurred while they were employed by Adnet. Indeed, now that Defendants won
        (Continued)
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               By contrast, in Williams, the employee merely switched jobs to Dominion’s

        competitor based on information he learned on his own. He did not reach out to Stihl or

        actively compete with Dominion for the same position. And, after Williams resigned,

        Dominion could have reached out directly to Stihl and engaged in a competition with

        ACSYS to fill the position. But it chose not to, precluding any competition. Conversely,

        Defendants did not simply apply for jobs with a company that bid against Adnet for the

        subcontract. Instead, Defendants, through RoLaJa, essentially were the company that bid

        against Adnet. In that sense, Defendants are more like ACSYS in Williams, not Williams

        himself. Williams therefore is not “directly on point,” as the district court erroneously

        concluded. Adnet, 2021 WL 4243424, at *6.

              At bottom, there is sufficient evidence of a direct competition for the subcontract

        between Adnet and Defendants while they were working for Adnet to bar a grant of

        summary judgment to Defendants. A reasonable juror could conclude that employees,

        like Defendants, breach their duty of loyalty to their employer when they learn of a

        potential business opportunity through their employment and then participate in a direct

        competition with their employer for that opportunity while still employed.

              Therefore, the district court erred in granting summary judgment to Defendants on

        Adnet’s claim for breach of the duty of loyalty, and its judgment must be reversed.

        the subcontract, there is no competition. Defendants could have solicited non-Adnet
        clients while still employed, but that is not what happened here. Instead, they went head-
        to-head with their employer—while still employed—for business their employer
        specifically sought.

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                                                   IV.

              Adnet next argues that the district court also erred by concluding that no

        reasonable jury could find that it had a valid business expectancy with GDIT and

        therefore erroneously granted summary judgment to Defendants on its claim for tortious

        interference with a business relationship. Again, we agree.

              The elements of tortious interference with a business relationship in Virginia are:

        “(1) the existence of a business relationship or expectancy, with a probability of future

        economic benefit to [the] plaintiff; (2) defendant’s knowledge of the relationship or

        expectancy; (3) a reasonable certainty that absent defendant’s intentional misconduct,

        plaintiff would have continued in the relationship or realized the expectancy; and (4)

        damage to plaintiff.” Williams, 576 S.E.2d at 757 (citation omitted). When a contract is

        terminable at will, the plaintiff must also prove that the defendant employed “improper

        methods,” Duggin v. Adams, 360 S.E.2d 832, 836 (Va. 1987) (citation omitted)—

        methods that are illegal, independently tortious, or “violate an established standard of a

        trade or profession,” id. at 837. Proof of a breach of the duty of loyalty satisfies the

        improper methods requirement. Dunn, McCormack & MacPherson v. Connolly, 708

        S.E.2d 867, 870 (Va. 2011).

              The parties dispute only the first and third elements, which are related. To

        demonstrate a probability of future economic benefit, the plaintiff must show more than a

        “mere ‘possibility’” of a benefit. L-3 Commc’ns Corp. v. Serco, Inc., 926 F.3d 85, 94 (4th

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        Cir. 2019) (cleaned up). In other words, “proof of a plaintiff’s belief and hope that a

        business relationship will continue is inadequate.” Id. (citation omitted).

               Adnet argues that the evidence demonstrates a sufficient probability of future

        economic benefit in the subcontract to bar summary judgment. It points to GDIT’s

        “concrete steps” towards awarding Adnet the subcontract—stating that it would start the

        process with its subcontracts manager, requesting Adnet’s pricing, and using that pricing

        to secure approved funding from the Army. Opening Br. 50. Adnet also notes that

        GDIT’s subcontracts manager stated that it generally sole-sourced this type of

        subcontract and had not competed one in her ten years at GDIT. Defendants respond that

        Adnet did not have a business expectancy in the subcontract and it is not reasonably

        certain that absent Defendants’ conduct GDIT would have awarded Adnet the

        subcontract. They instead contend that GDIT decided to compete the subcontract in part

        because of Adnet’s high prices and request to support its lab—reasons wholly

        independent of their actions. To support their argument, Defendants rely on Commercial

        Business Systems.

               In that case, Commercial Business Systems (CBS) won a contract to repair certain

        communications equipment for BellSouth for two years. Com. Bus. Sys., 484 S.E.2d at

        895. Months before it was time for renewal, a CBS official asked a BellSouth employee

        about CBS’ chances of renewal. The BellSouth employee stated that getting the renewal

        was “not going to be a problem . . . you guys are one of the best vendors we have . . . .

        You’re doing your work, performing like you’re supposed to and you [are] also the

        incumbent.” Id. (alterations in original). Thereafter, that BellSouth employee was

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        replaced by a different employee. Id. Simultaneously, CBS began having financial

        problems, such as issues with cash flow, liabilities exceeding its assets, and having to

        close certain offices. Id. at 897. BellSouth learned of these financial difficulties and the

        new BellSouth employee did not award CBS the renewal. Id. at 895. Instead, the new

        BellSouth employee awarded it to Halifax who had allegedly bribed the BellSouth

        employee for the contract. Id. at 896.

               CBS brought a claim for tortious interference with a business relationship against

        Halifax. Even though the original BellSouth employee stated that renewal was “not going

        to be a problem,” the court concluded that “at the time the contract was about to expire”

        the record was “utterly devoid” of evidence of a probability that the contract would have

        been renewed. Id. at 895, 897. For one, the employee who made that statement was no

        longer the person deciding whether BellSouth would renew the contract. Additionally,

        CBS’ financial problems that occurred months after the statement was made turned CBS

        into a “tarnished participant in the competition.” Id. at 897. And there was no credible

        evidence that BellSouth had a standard practice for continuing to work with incumbent

        vendors. Id. at 898. Thus, the court determined that all CBS had was a subjective belief

        that BellSouth would renew the contract and therefore did not have a business expectancy

        in the contract. Id.

               Defendants argue that Commercial Business Systems supports their argument

        because after Adnet asked GDIT to cover its costs for Adnet’s demo lab, it became a

        “tarnished participant” in the competition. Resp. Br. 50 (quoting Com. Bus. Sys., 484

        S.E.2d at 897). Thus, they contend, that the fact that GDIT originally made statements

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        implying that it would award Adnet the subcontract does not matter because the

        circumstances changed. Defendants also assert that the lack of a business expectancy is

        clearer here than in Commercial Business Systems because GDIT had not previously

        worked with Adnet and did not know of Adnet until shortly before awarding Defendants

        the subcontract.

               But Commercial Business Systems is substantially distinguishable. First,

        Knickerbocker, the GDIT employee who told Adnet that she would start the process with

        her subcontracts manager and that she looked forward to working with Adnet, did not

        switch positions—she was in the same position both when she made these statements and

        when GDIT decided to compete the subcontract. Second, these statements indicating that

        Adnet would be awarded the subcontract were made during the subcontracting process,

        not months before, making Adnet’s business expectation more reasonable than the one in

        Commercial Business Systems. Moreover, there is credible evidence that GDIT normally

        does not compete subcontracts in similar circumstances. In fact, the subcontracts manager

        stated that in her more than ten years at GDIT she had not competed this type of

        subcontract. Thus, Adnet had more than a mere hope that it would be awarded the

        subcontract—this evidence suggests the existence of a business expectancy in the

        subcontract, with a probability of future economic benefit to Adnet. In any event, there

        are disputes of material fact that would bar summary judgment on this point.

               Additionally, there is evidence of a reasonable certainty that but for Defendants’

        intentional misconduct—reaching out to GDIT and then bidding for the subcontract while

        employed by Adnet—Adnet would have been awarded the subcontract. Although GDIT

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        stated at depositions that it decided to compete the subcontract in part due to concerns

        with Adnet’s high prices and the request that GDIT pay for its lab, there is again a dispute

        of material fact as to whether GDIT would have competed the subcontract based on these

        facts alone. After Adnet gave GDIT its pricing, GDIT had those allegedly high prices

        approved by the Army, indicating that it was fine with moving forward at Adnet’s price.

        Additionally, there is no evidence that GDIT planned to compete the subcontract prior to

        Defendants reaching out to GDIT. Instead, GDIT decided to compete the contract only

        after Defendants informed GDIT that RoLaJa could perform under the subcontract. 11

               Accordingly, we conclude that there is sufficient evidence for a reasonable juror to

        conclude that Adnet had a business expectancy in GDIT’s subcontract and, absent

        Defendants’ intentional misconduct, a similar reasonable certainty that Adnet would have

        been awarded that subcontract.

               Therefore, we must reverse the district court’s grant of summary judgment to

        Defendants on Adnet’s tortious interference claim.

                                                    V.

               11
                  The fact that Adnet was ultimately not awarded the subcontract due to a
        deficiency in its proposal does not affect our conclusion. Had Defendants not reached out
        to GDIT in the first place, there is a dispute of fact as to whether GDIT would have
        competed the subcontract. Assuming, as we must at summary judgment, that GDIT
        would not have made the subcontract subject to competitive bidding, Adnet would not
        have been required to submit such a bid and the fact that it did not provide resumes may
        well not have mattered.

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               In light of the foregoing, we also vacate and remand the district court’s dismissal

        of Adnet’s business conspiracy claim.

               Business conspiracy under Virginia law occurs when two or more people

        “combine, associate, agree, mutually undertake or concert together for the purpose of . . .

        willfully and maliciously injuring another in his reputation, trade, business, or profession

        by any means whatever.” Va. Code. § 18.2-499(A). “[W]ithout proof of the underlying

        tort, there can be no conspiracy to commit the tort.” Com. Bus. Sys., 484 S.E.2d at 896.

               The district court concluded that because Adnet failed to establish either a breach

        of the duty of loyalty or tortious interference, there was no unlawful action that could be

        the predicate object of a conspiracy. Because we conclude that there is sufficient

        evidence of both a breach of the duty of loyalty and tortious interference with a business

        relationship, we remand Adnet’s claim for business conspiracy to the district court to

        determine in the first instance whether its remaining elements have been met.

                                                    VI.

               For these reasons, we reverse the district court’s grant of summary judgment to

        Defendants on Adnet’s claims for breach of the duty of loyalty and tortious interference

        with a business relationship. We vacate the district court’s grant of summary judgment to

        Defendants on Adnet’s business conspiracy claim and remand for further proceedings in

        accordance with this opinion.

                                  REVERSED IN PART, VACATED IN PART, AND REMANDED

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        WILKINSON, Circuit Judge, concurring:

               I am pleased to concur in Judge Agee’s fine opinion in this case, which rests

        rightly on the head of the proverbial pin. The facts frustrate easy attempts to glean any

        large anticompetitive principle from the case. There is a significant dispute as to whether

        the Adnet workers learned about the subcontract opportunity while on the job. The

        workers pled utter ignorance, but their text messages suggested that they were fully aware

        of Adnet’s subcontract bid days before the subcontract bids were due. J.A. 456. In other

        words, the workers may have used their inside information to undercut their own

        employer at the very time they were working for it. The particular facts here give rise to a

        jury question as to whether the workers breached their duty of loyalty.

               Moreover, the prime contractor was an unusual solicitation target for the workers.

        The prime contractor had extended initial outreach to Adnet, obtained Defense

        Department approval for Adnet’s offer, and had an extremely limited track record of

        making subcontractors compete. On these specific facts, the workers may have sparked

        an asymmetric bidding war with Adnet, where the workers knew of Adnet’s involvement

        in the contracting process, but Adnet was unawares. The particular facts here raise a jury

        question as to whether the workers tortiously interfered with their employer’s legitimate

        business expectancy.

               At the same time, Virginia employers and employees should view the disposition

        of this fact-bound case in the broader context of Virginia law. The commercial torts at

        hand can have the same anticompetitive effects as formal non-compete agreements

        without their offsetting benefits for workers, such as bargained-for consideration and

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        contractual limits. I do not think our decision undermines the proposition that Virginia

        law confines the scope of commercial torts in recognition of the importance of employee

        rights and free competition.

               To begin, the Virginia Supreme Court has made clear that, absent contractual

        restrictions, workers are entitled to “make arrangements” to compete with their employer.

        Williams v. Dominion Tech. Partners, L.L.C., 576 S.E.2d 752, 757 (Va. 2003). The mere

        “fact that particular conduct of an employee caused harm to his employer” will not create

        liability. Id. at 758. To the contrary, employee loyalty is better earned in the “competitive

        marketplace” than ensconced in the law. Id. (quoting ITT Hartford Group, Inc. v. Va. Fin.

        Assocs., Inc., 520 S.E.2d 355, 361 (Va. 1999)).

               The examples of violations in Williams set a high bar, and not by accident.

        Virginia law incorporates a “policy of free competition.” Feddeman & Co. v. Langan

        Assoc., 530 S.E.2d 668, 672 (Va. 2000). Formal covenants not to compete are routinely

        struck down as “disfavored restraints on trade.” Omniplex World Servs. Corp. v. U.S.

        Investigations Servs., Inc., 618 S.E.2d 340, 342 (Va. 2005) (comparing cases). More

        recently, the Virginia legislature outlawed non-compete agreements entirely for workers

        with below-average salaries. See Va. Code Ann. § 40.1-28.7:8 (2020).

               Virginia law thus recognizes that non-compete agreements and commercial-tort

        doctrines can have a deadening effect on competition, which often translates to higher

        prices and lower quality. This case is Exhibit A: But for the workers’ bid, the prime

        contractor—and in turn the federal government to whom the contractor passed along the

        costs—was to pay ninety percent more in the subcontract’s third year. Anticompetitive

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        measures can moreover drain the vitality from the economy, entrenching incumbents

        while making start-ups more difficult to form and hard to grow. Ronald J. Gilson, The

        Legal Infrastructure of High Technology Industrial Districts: Silicon Valley, Route 128,

        and Covenants Not to Compete, 74 N.Y.U. L. Rev. 575, 579 (1999).

               Today’s employers may wish to freeze the status quo, but Virginia law does not.

        To be sure, the Commonwealth does protect a legitimate range of employer interests,

        centered chiefly around the theft of trade secrets. Williams, 576 S.E.2d at 758. The law’s

        competitive bent is thus tempered for reasons of “integrity and fairness.” Feddeman,

        530 S.E.2d at 672. One can sympathize with the company that invests years training a

        worker only to see the fruits promptly be put to use for a rival. While decent treatment of

        employees is the most reliable antidote to such worker departures, Williams, 576 S.E.2d

        at 758, the commercial torts provide a limited backstop against particularly disloyal or

        disruptive conduct.

               But the negative side of non-competes and commercial torts, outside this sphere of

        employer interests, is severe. These restrictions can render employment relationships

        sclerotic, overriding a worker’s “right to secure gainful employment.” Omniplex,

        618 S.E.2d at 342. In so doing, they risk depriving workers of what little leverage and

        bargaining power they might have. In addition, anticompetitive arrangements can force

        workers to move to a new town or state to avoid the oppressive overhang of their past

        job. Such effects are especially felt by those who anticipate being laid off. Given the

        perils of job loss, it is difficult to fault workers who must support their families and

        themselves by seeking employment continuity.

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               The foregoing considerations explain why a multitude of states, Virginia included,

        has enacted partial or wholesale prohibitions on contractual barriers to finding work.

        See, e.g., Cal. Bus. & Prof. Code § 16600; Colo. Rev. Stat. Ann. § 8-2-113(2)(a); Okla.

        Stat. Ann. tit. 15, § 219A; Va. Code Ann. § 40.1-28.7:8. In the absence of further

        legislation, I do not understand Virginia law to be insensitive to the detrimental effects of

        expansive commercial torts. Though factual disputes preclude summary judgment in this

        narrow context, I am wary of giving license to common-law torts beyond the strict limits

        countenanced by Virginia law.

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