What You Need To Know About Non Compete Agreements Fox Moghul

Bonisiwe Shabane

-Oct 31, 2025, 1:01 PM

what you need to know about non compete agreements fox moghul

At Fox & Moghul, we are Virginia’s top business and employment attorneys, specializing in non-compete agreements and restrictive covenants. Whether you are an employer seeking to protect trade secrets or an employee fighting an overbroad restriction, our legal team has extensive experience in drafting, negotiating, and litigating non-compete agreements across Fairfax, Arlington, Loudoun,... This guide covers everything you need to know about Virginia non-compete agreements, including key case law, enforceability standards, and common pitfalls. A non-compete agreement (also known as a covenant not to compete) is a contractual restriction that prohibits an individual from working in a specific field or geographic area after leaving a company. Employers use non-competes to protect confidential information, trade secrets, and client relationships from competitors. Common Uses of Non-Competes in Virginia:✔️ Preventing former employees from working for direct competitors✔️ Restricting contractors or partners from soliciting clients✔️ Protecting proprietary business practices from being used by competitors

Virginia Law: Enforceability of Non-Compete Agreements The Federal Trade Commission (FTC) issued a new rule banning non-compete clauses for most workers in the US, and some local workers say that could benefit consumers, too. SEATTLE - The Federal Trade Commission (FTC) issued a new rule banning non-compete clauses for most workers in the US, and some local workers say that could benefit consumers, too. The agreements have long-stopped workers from jumping to jobs with better pay, or prohibited them from starting competing companies for a prescribed period of time. In some cases, the clauses don't just harm workers, but clients as well. "I was with Merrill Lynch and of course they didn’t want me to take clients away," said Jeff Janeway.

"Not that I had much in the way of clients to take." Washington state law just changed in a way that might have made your company’s non-solicitation agreements unenforceable and illegal. Recent amendments to the state non-compete statute took effect on June 6 and significantly changed both the statute and existing case law when it comes to which non-solicitation agreements can be enforced by employers. The new law also broadens the definition of prohibited non-compete agreements. You will need to re-visit your employment agreements to ensure they are compliant with the amended statute. Quick Background on the Washington Statute

Washington’s non-compete statute has been in effect since 2020. To be valid and enforceable under the law, such an agreement must: The statute allows for strict liability. Aggrieved employees may recover either a flat fee of $5,000 in penalties, or (more commonly) their actual damages, reasonable attorneys’ fees, expenses, and costs. Broadening The Prohibition on Unlawful Non-Compete Agreements It is estimated that one in five workers in the United States is subject to a non-compete agreement.

Depending on how the employer has written the agreement, to varying degrees, the non-compete restricts an employee’s ability to work for a competitor after their employment ends. These restrictions have long raised serious public policy concerns. On the one hand, employers argue that they need to protect their business interests, which include investments made in training and developing employees and products, as well as retaining customers. On the other hand, non-compete agreements impede employee mobility and may flat-out prevent an employee from making a living for a period of time. There is also concern that employers often write the agreements in a way that overreaches in the scope and duration of the restrictions, and that the agreements are adhesive – meaning that most employees... There is also a healthy amount of skepticism about whether employers need the business protections they often cite in support of enforcing non-compete agreements, because there are other existing or available protections (for example,...

In reality, most employees do not present a high level of competitive risk to the company when they depart employment. Nevertheless, these agreements have become so ubiquitous that the popular press has picked up stories at the extremes. Infamously, the hourly “sandwich artists” at Jimmy John’s were subject to non-compete agreements. So were teenage counselors at a summer camp. Are these restrictions enforceable? Given the current landscape, it’s complicated.

The regulation of non-competes has historically been left to either state statutory law or common law contract doctrine. Under the Biden administration, the Federal Trade Commission voted 3-2 to issue a final rule banning non-competes nationally, with very limited exceptions. The Commission cited concerns about “the tendency of non-competes to harm competitive conditions in labor, product, and service markets.” The FTC rule was challenged by employers in three federal courts, with mixed results. The U.S. District Court for the Eastern District of Pennsylvania refused to preliminarily enjoin the rule from going into effect, and the employer (a tree removal service) voluntarily withdrew the challenge.

Conversely, in a case brought by the Villages (yes, the retirement community) in Florida, the U.S. District Court for the Middle District of Florida granted a preliminary injunction preventing the law from taking effect, but limited the scope of its ruling to the parties in that case. Most significantly, just weeks before the rule was to go into effect, in Ryan v. Federal Trade Commission, the U.S. District Court for the Northern District of Texas permanently enjoined the rule nationwide. The court found that the FTC lacked statutory authority to promulgate the rule, and that the rule was arbitrary and capricious.

Andy Smith is a Certified Financial Planner (CFP®), licensed realtor and educator with over 35 years of diverse financial management experience. He is an expert on personal finance, corporate finance and real estate and has assisted thousands of clients in meeting their financial goals over his career. A non-compete agreement is a legal contract that restricts an employee from competing with their employer after the employment relationship ends. It often includes clauses that prevent the disclosure of company secrets or proprietary information. Such agreements are designed to protect a company's market position by barring employees, contractors, and consultants from joining or starting a competing business for a defined period. This period and geographic scope can vary, but the intent is to safeguard the employer’s competitive advantage in the industry.

On April 23, 2024, the Federal Trade Commission (FTC) issued a final rule banning non-compete clauses; the rule aims to protect workers’ freedom to change jobs, increase innovation, and generate new business. The FTC first issued the proposed ban on Jan. 5, 2023. It believes this ban will help an estimated 30 million people. Whether you call it a non-compete agreement or a covenant not to compete, there is no denying there is a lot of confusion out there regarding this particular type of contract. What are they?

What do they mean for employers and employees? And, are they even enforceable? So, before you enter into a non-compete agreement — either as an employer or employee — there are several things you need to know. Non-compete agreements are contracts between an employer and an employee that are typically signed at the start of their business relationship. Essentially, a non-compete agreement prohibits the employee from competing with the business directly or indirectly for a specific duration of time after their employment has ended. While the contents of the non-complete may vary from company to company, they may attempt to prohibit the employee from things such as:

However, just because an employer may want to prevent an employee from competing against them, it isn't always that easy. In fact, there are very specific rules regarding the enforceability of non-compete agreements, which can vary from location to location. On April 23, 2024, the Federal Trade Commission (FTC) issued a final rule, with a 3-2 decision, which will ban noncompete agreements in the United States. The FTC touted the final rule as one necessary to promote competition, to protect the freedom of workers to change jobs and to foster new business formation. The rule was proposed in January 2023 by the FTC, which received over 26,000 comments during the 90-day public comment period, the large majority of which were in support of the proposed rule. The final rule will become effective in 120 days.

Under the final rule, employers are obligated to notify workers that existing noncompete agreements will not be enforced. The rule includes model language that employers may use to communicate this message to their workers. The only exception pertains to senior executives, who are defined by the final rule as workers who earn more than $151,164.00 annually and who are in policy-making positions within their organizations. Any existing noncompete agreement between an organization and a senior executive will still be enforceable. However, the new rule prohibits employers from entering into new noncompete agreements with senior executives. In response, the U.S.

Chamber of Commerce filed a lawsuit on April 24, 2024, challenging the legality of the FTC’s final rule, commenting that the proposed ban was “not only unlawful, but also a blatant power grab that... For additional information regarding the final rule and the impact it may have on your organization, please contact the Employment Law Group at Marshall Dennehey. In today's competitive business landscape, protecting your company's confidential information, customer relationships, and intellectual property is critical. This is where non-compete, non-solicitation, and non-disclosure agreements (NDAs) come into play. At Fox & Moghul, our business law attorneys can help draft and enforce these contracts to safeguard your business from unfair competition and ensure that your employees, partners, and contractors respect your proprietary interests. A non-compete agreement is a clause in a contract that imposes restrictions on an employee or contractor, preventing them from starting a business that would compete with their employer or working for another competing...

These agreements are common in industries where protecting trade secrets and proprietary knowledge is critical to maintaining a competitive advantage. Noncompete agreements in Virginia must meet several criteria to be enforceable. Courts will evaluate whether: For example, in Home Paramount Pest Control v. Shaffer, the Virginia Supreme Court found that a non-compete agreement was overly broad because it prohibited a former employee from participating in the pest control industry in any capacity, even as a passive investor. This type of overreach can make a non-compete agreement unenforceable.

In Virginia, courts closely scrutinize non-compete agreements, ensuring they balance employer protection and employee rights. The burden is on the employer to demonstrate that the restrictions are reasonable, considering:

What You Need To Know About Non Compete Agreements Fox Moghul

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