Recently, the Virginia Supreme Court issued a decision in Home Paramount Pest Control Companies, Inc. v. Justin Shaffer, et al., Record No. 101837, — S.E.2d —-, 2011 WL 5248212 (Nov. 4, 2011), that changes Virginia law regarding the enforceability of employee covenants not to compete, or at least formally recognizes changes to the law in this area that have occurred over the past several years. Summed up, Home Paramount is significant because it has established a narrower scope for what such a covenant (commonly known as a “non-compete”) can prohibit an employee from doing for a future employer and still remain enforceable under Virginia law. As a general matter, non-competes that are overly broad as to what they prohibit an employee from doing for a future employer risk not being enforceable under Virginia law, if challenged. The Home Paramount decision should be of particular importance to entities that employ persons in Virginia, most notably those entities who have non-competes with their employees or are looking to hire persons who have non-competes with other employers.
Click here to read the Kelley Drye client advisory on the Home Paramount decision for additional details.