An employer cannot object to an employee`s breach of a non-compete obligation without providing proof of the damage. Actual (monetary) harm can be proven by referring to cases of “successful competition” – competition by a former employee that leads to injury. If an employer has proven a breach of a valid non-compete obligation and has demonstrated actual breach, it may be able to assert claims for damages as set out in the agreement, which often contains flat-rate (double) compensation provisions. Employees should be aware that if you qualify for a low salary under the law, you probably do not need to abide by your non-competition code (if it is completed after July 1, 2020) and you can challenge the agreement if necessary. From 1. July 2020, Virginia employers cannot commit, enforce, or threaten not to compete with a “low-wage employee.” The law is punishable by severe penalties. An employer who breaks the law can face a civil penalty of $10,000 per violation. The law also gives employees the private right to sue in a circuit court against an employer who attempts to enforce a non-compete clause in violation of the new law. Finally, employers are required to publish the notification of the new law in the workplace.
The Virginia Department of Labor and Industry has not yet provided such advice. In essence, the new law is quite simple: no non-competition agreement that expires on or after the 1st. July 2020 can be applied (or threatened with enforcement) against a low-wage worker, and such an agreement cannot be reached with a low-wage worker after July 1. It should also be noted that the law allows workers to sue the former employer “or another person trying to enforce them.” By using the phrase “or another person who is attempting to enforce the law,” the law does not specify whether an employee can sue a former employer or simply a former employer who attempted to enforce the non-compete obligation. A “low-wage employee” is any employee who earns less than the commonwealth average weekly wage, which the Virginia Department of Labor and Industry has confirmed, which is currently $1,204 per week (or $62,608 per year). However, this amount may change, meaning that to ensure compliance with the law, employers must continually reassess whether employees who are subject to non-compete obligations are considered “low-wage workers”. F. If the court finds a violation of the provisions of this Section, the claimant is entitled to recover reasonable costs, including reasonable fees and expenses for experts, as well as attorneys` fees, from the former employer or any other person who attempts to enforce an obligation not to compete with that claimant. Non-compete obligations generally limit where, how or for whom employees can work after leaving their employer.
In order to assert a non-compete obligation before a court, it is up to the employer to prove that it is valid. The courts take into account a number of factors in assessing the legality of a non-compete obligation, including the reality of the situation, which is, however, much more complicated than it appears. Even if your employer has made you sign an absurdly broad non-compete clause that a court will surely invalidate, they can still sue you to try to enforce it, forcing you to represent the claim. To get to the point where a judge or jury says you`ve dropped the deal, you may have to spend tens of thousands of dollars on legal fees and fees that you may not be able to recover if you can afford to go that far. In short, even an invalid non-compete clause can hurt your job prospects and financial health. A non-compete obligation is a contractual promise – or, as it is sometimes called, a restrictive agreement – between two parties, usually the employee and the employer, that governs the employee`s conduct after the end of the employment relationship. The purpose of a non-compete agreement is to ensure that the former employee does not hold competitive employment after leaving the employment relationship. Before July 1, 2020, employers should review their form bans – and other restrictive agreements – to ensure compliance with the new restrictions. Employers should also publish the required notice of the new law by the same date. And remember, they can`t even threaten to enforce a non-compete clause (in the broadest sense) that took place on the 1st. July 2020 or later against a low-wage worker (i.e., someone who earns about $50,000).
If you work in the Commonwealth of Virginia and have signed a contract with your employer that includes a non-compete clause, there may be legal consequences if you violate that agreement. You need to know how this may affect you in case you are fired or decide to change jobs. The law firm Erlich can help you assess and navigate these situations, whether you`re working for a defense contractor in Fairfax, a nonprofit in Alexandria, or a tech startup in Tyson`s Corner. The new law contains a grandfather clause according to which the new restrictions only apply to non-compete obligations concluded from 1 July 2020. As Virginia begins to ease its home support restrictions due to COVID-19, employers may want returning employees who have not yet signed a non-compete agreement to do so when they return to work. Agreements signed before 1 July 2020 are exempt from the new law. On April 9, 2020, Virginia Governor Ralph Northam signed SB 480 (“An Act to amend the Virginia Code by adding 40.1, Chapter 3, Section 1, a section numbered 40.1-28.7:7, which deals with the obligations not to compete; low-wage workers; Civil penalty. The new law prohibits an agreement or arrangement that “restricts, prohibits or otherwise restricts a person`s ability to compete with his or her former employer after the end of his or her employment relationship.” And thank you. Thanks to our intern Elizabeth Dreisbach (Boston University School of Law) and Erika Hahn for her extensive work, which followed and summarized the state of all current competition and trade secret laws, including those.
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