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Beginning a new job is a time of optimism and excitement for most, and the last thing under consideration is what happens if the opportunity doesn’t work out. However, if the employer requires the new hire to sign a non-compete agreement before he or she can start work, it is important to understand the ramifications of signing that agreement when the employment relationship ultimately ends.
Generally speaking, Virginia law disfavors restrictions on trade, and thus, restrictions on competition are subject to close scrutiny by the courts. Nonetheless, many employers include such non-compete agreements as part of an employment contract or as a stand-alone document. Typically, by signing the agreement, the employee agrees not to work for a competitor of the employer for a certain period of time post-employment.
If the employee does subsequently gain employment with a competitor, the former employer may seek a legal remedy by filing a lawsuit against the individual for breach of contract and also against the new employer for tortious interference. In some cases, the new employer will simply terminate the employee rather than risk the uncertainty of litigation.
If the case is litigated, the courts will generally look to the reasonableness of the non-compete agreement. Recognizing that there are legitimate interests of the employer to protect such as client lists and specialized information, an agreement that is limited in duration and geographic area may be enforceable by the court. The specific facts of each case are important in the court’s analysis.
Contact an Arlington Business Attorney for Legal Advice
It is best to fully understand the implications of an employment agreement before you enter into it. If you have already signed one that includes post-employment restrictions, you should consult with counsel before you leave the job. For any questions, call Schleifman Law, PLC, an Arlington business lawyer, at 703-528-1021.