Enforcing Non-Compete and Non-Solicitation Provisions in Virginia: Three Recent Takeaways From a Virginia Trial Court

As a result, employers should review the scope of their restrictive covenants agreements to ensure they are narrowly tailored to protect an articulable business interest and reflect the employer’s actual and legitimate competitive concerns. 

In short, the Metis decision is consistent with the national trend toward more limited enforcement of restrictive covenants. View the FTC Alert[1] here. Restrictive covenants will be enforced, however, with careful and considered drafting; and proper evidentiary support for their scope.

[1] See The Metis Group, Inc. v. Allison, et al., No. CL 2019-10757, 2020 WL 201152, at *1 (Va. Cir. Ct. Jan. 08, 2020).

[2] Id. at *1.

[3] Id. at *2.

[4] Many non-compete cases are litigated in state court, rather than federal, because there often is no jurisdictional diversity between or among the parties and there is no federal claim at issue.  The relatively recent enactment of the federal Defend Trade Secrets Act (DTSA) statute, however, generally permits federal filing of these claims where there is related misappropriation of trade secrets.

[5] 286 Va. 137 (2013).

[6] It is worth noting that evidence beyond the facts in the complaint may be presented at preliminary injunction hearings, as the employer has the burden of proving they are likely to prevail on the issue of enforceability in order to obtain that emergency relief. It is also worth noting that the trial judge in Metis recognized that there remain instances in which the court could determine, on demurrer and on the face of the contract, whether the covenants are enforceable. See The Metis Group, Inc., 2020 WL 201152, at *8 n.3; see also Reading & Language Learning Ctr. v. Sturgill, 94 Va. Cir. 94, at *9 (2016).

[7] The Court confirmed the three factors for enforceability stating that the restriction must (1) be narrowly drawn to protect the employer’s legitimate business interest; (2) not unduly burden the employee’s ability to earn a livelihood, and (3) not violate public policy. In considering factor one, the Court also considers the following elements: function, geographic scope, and duration of the restrictive covenants.

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