Non-Compete Law in Virginia and Maryland

Non-compete agreements are often contained in an employment agreement or independent contractor agreement, but may also be executed as a separate document.   Non-compete agreements are intended to ensure that during the term of employment or for a period thereafter, an employee or former employee will not directly compete with his or her employer.  The non-compete agreement often contains provisions intended to prevent former employees from using proprietary information obtained during the employment relationship to appropriate their former employer’s customers at the expense of their former employer.  Most non-compete agreements specify a period during which the former employee is expected to refrain from engaging in activities that will place him or her in direct competition with a former employer.  Not all provisions contained in non-compete agreements are lawful – the validity of each provision is determined by state law.

Many employment or business relationships require that one of the parties agree not to compete with the other in a certain territory or for a certain time.  The courts of law will sometimes uphold such agreements, and sometimes not. Advice from a qualified Virginia or Maryland non compete attorney is essential in this area.  If you require assistance with a covenant not to compete or a non-compete agreement, either in negotiating or drafting such an agreement or in litigating such a dispute in Virginia or Maryland, the non compete attorneys of the SRIS Law Group, P.C. will bring their understanding of competition law to bear in aggressively assisting you with your case.

VIRGINIA CASE FOR NON COMPETE

FACTS:

A corporation filed its amended motion for judgment against a doctor, alleging that the doctor, the corporation’s former employee, breached a covenant not to compete. After the Circuit Court of Campbell County (Virginia) denied the doctor’s motion to dismiss, and following a bench trial, a judgment was entered in favor of the corporation. The doctor appealed. He asserted that the former corporation cannot “engage in the practice of medicine” in Virginia because it does not have a license to practice medicine in this Commonwealth. As a consequence, he contends that the former corporation does not have a legitimate business interest in enforcing the covenant not to compete.

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MARYLAND CASE FOR NON COMPETE

FACTS:

The former employee went to work for a competitor. Sometime during his employment with the employer, the employer presented a confidentiality and covenant not to compete agreement, which prohibited the former employee from working for a competing business within a 75-mile radius of the employer’s principal place of business for one year after leaving, subject to a liquidated damages provision of $ 50,000 in the event of a breach. The employer paid $ 50 to the former employee for signing the agreement. After a bench trial, the trial court awarded the employer nominal damages of one dollar, rejecting the employer’s argument that it was entitled to liquidated damages pursuant to the terms of agreement. Appellant employer challenged the judgment of the Circuit Court for Montgomery County (Maryland) in favor of appellee, a former employee. The employer had filed a breach of contract action against the former employee, seeking to recover liquidated damages based upon the terms of an employment contract.

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