While non-compete agreements are fairly common in today’s business world, Virginia courts disfavor them and will not enforce them unless they are narrowly tailored to protect legitimate business interests. Virginia courts will not modify or “blue pencil” overly restrictive non-compete agreements to make them reasonable and enforceable. The Virginia Supreme Court recently made its tough stance on non-compete agreements crystal clear in Home Paramount Pest Control Companies, Inc. v. Shaffer, 282 Va. 412, 718 S.E.2d 762 (2011), when it ruled a non-compete provision in an exterminator’s employment contract was unenforceable because the terms were too restrictive. On the heels of the Shaffer decision, the Virginia General Assembly then killed a bill introduced in its 2012 session (House Bill 1187) proposing to ban most restrictions on a former employee’s ability to engage in a lawful profession, trade or business. Analyzing the Shaffer decision provides insight not only for the rationale underlying Virginia’s tough stance on non-competes, but also guidance that may help draft non-compete provisions that can be enforced if violated.
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