Here’s the scenario: An employee leaves a local business to work for a nearby competitor performing the same type of work.  The employee signed a non-compete agreement as a condition of employment with the first employer.  The business owner wants the agreement enforced when his employee leaves to work for a competitor.  Should be simple, right?  It depends.

When I review non-compete agreements that were not drafted by me, I occasionally see agreements that are way too broad in scope.  After stripping away all the legal jargon, the agreement essentially amounts to an absolute prohibition: “If you leave my business, you can’t work in the industry.” 

Two things immediately come to mind.  First, I assume that the non-compete agreement is a modification of something found on the internet.  Second, I think about how to tell the business owner that they could have saved a lot of time and expense by hiring a lawyer to draft a good non-compete agreement at the beginning rather than a litigator who is trying to enforce a lousy non-compete agreement.

A good litigator not only knows how to advocate for the client in court, but also how to keep the client out of court.  Towards this end, litigators should ask to review their business clients’ non-compete agreements (and all other employment agreements for that matter).  They should also educate their clients on the how to view such an agreement.

Courts tend to view non-compete agreements unfavorably because they restrain a person’s livelihood, and therefore courts scrutinize the reasonableness of such agreements.  “Reasonableness” relates to the length of time of the employment restriction, the geographic scope of the employment restriction, and the type of work being restricted.  There is a body of case law related to each of these components, and it varies from state-to-state. 

In Virginia, for example, if a salesperson at a one-store auto dealership in Fairfax has signed an non-compete agreement, it is not reasonable to prohibit that person from being a salesperson in another industry in another state for the next ten years.  Even if that’s not what the business owner envisioned when drafting the agreement, it is the language of the agreement itself that will be scrutinized and the scenarios that fit within the language.

Of course, once it becomes apparent that a non-compete agreement is unenforceable, nobody will view it as a serious document.  At that point, you may need a doctor to treat your headache more than a lawyer.