3.1 Introduction and Overview

• Library: Virginia Employment Practices and Forms (Virginia CLE) (2015 Ed.)

3.1 INTRODUCTION AND OVERVIEW

3.101 History of Virginia Law Regarding Restrictive Covenants. The law of restrictive covenants/noncompetition agreements in Virginia dates back more than 50 years. Although certain black-letter principles have been fairly well established, the application of those principles to particular factual settings continues to produce surprises, as evidenced by five Virginia Supreme Court decisions, Modern Environments, Inc. v. Stinnett, ¹ Motion Control Systems, Inc. v. East, ² Simmons v. Miller, ³ Omniplex World Services Corp. v. US Investigations Services, Inc., ⁴ and Home Paramount Pest Control Cos. v. Shaffer. ⁵ These cases, which are discussed below, underscore what experienced practitioners already know: noncompete agreements, seemingly simple and straightforward on the surface, pose a trap for the unwary client and attorney.

In this age of innovative technology and intense competition, companies often require employees to sign restrictive covenants as a condition of employment or continued employment. In a pure noncompete agreement, an employee agrees not to compete with the employer in a narrowly defined area for a specified period following termination of his or her employment. One variation of the noncompete agreement is a nonsolicitation covenant, under which the employee agrees not to solicit the customers or employees of the former employer following termination of the employment relationship.

Under early English...