In a case that redefines employment law in Virginia, the State Supreme Court recently issued a definitive ruling on the scope and breadth of not to compete covenants. In Home Paramount Pest Control v. Shaffer, et al., the court agreed with Sickels, Frei & Mims partner Charles Sickels that the employer’s non-compete restriction was overbroad and unenforceable because it effectively restricted former employees from performing any activity whatsoever for any competitor of the former employer’s. Further, the Court said that the Covenant was not reasonably limited to protect only the employer’s legitimate business interests. The Court noted that the law of non-compete agreements had evolved in Virginia since 1989 in Paramount vs. Rector when it had upheld an identical covenant. Sickels represented Paramount in that case. The Court examined the function component of the restrictive covenant to determine whether the covenant was reasonable and no more restrictive than necessary. The restriction in the employment function with a new employer must be related to the functions the employee performed with the former employer.
Read the full opinion: HOME PARAMOUNT PEST CONTROL COMPANIES, INC. v. JUSTIN SHAFFER, ET AL., No. 101837, November 4, 2011, OPINION BY JUSTICE WILLIAM C. MIMS.pdf
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