3.6 Drafting Considerations for Noncompetition Agreements

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

3.6 DRAFTING CONSIDERATIONS FOR NONCOMPETITION AGREEMENTS

Few areas of the law appear as deceptively simple and straightforward as the drafting of a restrictive covenant in an employment setting. Practitioners must be vigilant to consider the following factors in drafting or reviewing noncompetition agreements:

1. Noncompetition agreements in Virginia are strictly construed against the employer, and courts have been unwilling to modify the terms of an overbroad agreement to make the agreement enforceable. Agreements must be carefully drafted to accurately reflect the balance between the employer's right to restrict competition and the employee's right to earn a livelihood.

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2.	In drafting restrictive covenants, counsel should remain aware that the relevant factors of the agreement must be viewed in an interrelated manner, and consequently a longer duration may be permissible in some situations than in others depending on the other restrictions in the covenant. 456
3.	In most instances, a noncompete agreement should specifically restrict competition by an employee only in the branches or lines of the employer's business in which the employee has performed work. 457 Counsel drafting these agreements should engage in thoughtful dialogue with employer clients to ascertain the true extent of the employer's legitimate business interest.
4.	Counsel should inquire whether the employer can achieve the stated ends simply by requiring that the employee not solicit, sell to, or have business contact with any customers or active prospects of the employer. These types of nonsolicitation agreements, which do not prohibit the employee from earning a livelihood but only from taking advantage of the employer's relationships, are much more likely to be enforceable. However, counsel may wish to consider a geographic scope limiting the area in which the employee must refrain from solicitation. Case law indicates that courts may still insist that such a limitation be included even when the provision is firmly based on restricting the employee's use of business contacts gained during the course of employment. 458
5.	Depending on the nature of the particular employee's work, counsel should consider tailoring the noncompete agreement to restrict competition by an employee only in the geographic area in which the employee has performed work rather than in every geographic area in which the employer has operations. An exception to this principle may be made where the employee has held a position of

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significant responsibility in the company in which he or she had access to confidential information regarding the employer's activities in areas

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