This is the case in Virginia, where its Supreme Court has ruled that non-compete clauses are disfavored because they impose unreasonable restrictions on an employee’s ability to earn a living. Therefore, under Virginia law, the employer bears the burden of proof to show that the non-compete clause is reasonable and not a restraint on trade. The Court has ruled that for a non-compete clause to be reasonable it must be (1) no more restrictive than necessary to protect the employer’s legitimate business interest, (2) not unduly burdensome on the employee’s legitimate efforts to earn a livelihood and (3) not against public policy. This is a question that must be decided by the court on a case-by-case basis.
Similarly, there is no set geographic restriction limit that automatically renders a non-compete clause reasonable; before a determination is made as to reasonableness, the court must take into consideration the individual facts of the case. With that said, the smaller the geographical limitation, the more likely that the clause will be found reasonable, and thus enforceable by the court. However, Virginia’s courts have also stated that the lack of a geographic limitation restriction is not grounds for invalidity if the clause is reasonable when viewed in its entirety.
In addition to the typical non-competition provision that prevents an employee from competing in general, Virginia common law has recognized two types of legitimate business interests that are deemed appropriate for the inclusion of a non-compete clause in an agreement: preventing a former employee from poaching his former employer’s clients who which he had direct contact with during his tenure in his former position; and preventing employees who had access to confidential information, proprietary information and trade secrets from sharing that information with third parties or using it for his competitive advantage.
These legitimate business interests must be balanced with the employee’s legitimate efforts to earn a livelihood. Under Virginia common law, a non-compete clause may be found reasonable if its geographic scope and duration does not prevent the former employee from working in a noncompetitive capacity within the restrict area or providing services similar to his former employer outside the restricted area.