Employment law faces a paradox in Virginia when employers require employees to sign non-compete agreements. Those are agreements that employers require which limit for whom an employee may work, and for how long, after vacating a position. Virginia is a right to work state. In right to work states laborers can work for whomever they choose, and employers may hire or fire whomever they choose.
Some employees think that means non-compete agreements have no force in Virginia. Some employers think that what their employees sign establishes absolute employer rights. Neither view correctly interprets Virginia law, because the issues go beyond labor law.
Virginia’s right to work law affects labor law – and labor law alone. Nothing in labor law negates contract law. When employees sign non-compete agreements they make a contract for services. The strength of a non-compete contract depends on the contract’s validity and clarity. While employers can exert the full-force of a valid contract under contract law, many things can make a contract invalid. It takes an attorney to advise either employers or employees on the validity of a contract, and when a conflict arises it takes a court to rule on it.
If the terms of a contract are either too vague or too strict, that may invalidate it. It may also not prove binding if the language is confusing, or self-contradictory. If a non-compete agreement is written in such a way that it would virtually eliminate an employee leaving for any company at all, that could be considered too restrictive. It cannot try to monopolize an employee’s own skills. It must simply protect employers from losing important work product or unique knowledge to competitors.
Many manufacturers and service providers have patented formulas or techniques they have gained only after investing in extensive research. This is intellectual property. Companies have as much a right to that property as to any real estate or inventory. Companies hiring skilled employees to work with proprietary techniques trust them as much as, for example,they trust a fleet manager working with vehicle parts and fuel. When a fleet manager uses company gas or parts for a personal vehicle, that is theft.
Taking intellectual property from one employer to a competitor is also theft. Nothing in Virginia labor law negates property law or criminal law. Even if a non-compete agreement makes some invalidating rule, like having a permanent restriction on working for someone else, that does not change property law or criminal law. When employees disregard such agreements and give new employers proprietary information, or reveal information about private marketing strategies, employers can still sue them for the damage this causes. In some cases employers stealing intellectual property can also face criminal charges.
Sorting out such problems can very costly after they happen, but this must be done. Attorneys can advice both employers and employees in Virginia of their rights and recourse regarding possible non-compete breaches. However, these threats can be mitigated in advance by making certain that any non-compete agreements qualify as enforceable contracts before employers draft them. and before employees sign them.
Law Office of Ryan C. Young, PLLC | Non-compete Agreements