When companies refer to their workers as liabilities, they don’t just mean the obligation to provide a paycheck. Employees can also engage in misconduct on the job that results in damage to the company or even sexual harassment lawsuits from other workers.
They can continue to harm the company even after they leave it if they use the information or connections obtained while working for a business to benefit their new employer or to start a new company. Employers try to minimize these risks by having their workers sign non-compete agreements.
These restrictive covenants prevent workers from directly competing with an employer after ending their employment relationship with the company. Do companies in Virginia and Washington D.C. have the right to make their workers sign non-compete agreements?
Virginia does allow non-compete agreements
Every state has its own rules, and Virginia is one of the majority of states that will permit non-compete agreements. Provided that an employer includes appropriate limitations on the applicability of the contract, both temporal and geographic, an agreement not to compete with the company may hold up even under court scrutiny.
However, state law does specify that low-paid workers should not have an obligation to sign non-compete agreements that would prevent them from providing for themselves or their family members.
Washington D.C. does not allow non-compete agreements
Those working in Washington D.C. do not mean to worry about non-compete agreements, as a local law making them unenforceable goes into effect in 2022. Although companies may try to convince their workers to sign the documents anyway, they will not be able to enforce them if the employee goes on to work for one of their competitors later.
Beyond just state law, the contents of the agreement and the compensation a worker received for signing it will also impact whether the civil courts will enforce the agreement or not. Employers generally need to offer some kind of valuable consideration for the agreement to be valid. Workers often sign them when accepting an offer of employment or during a promotion because the new job is the consideration they receive in return for their concessions.
Learning more about non-compete agreements can help both businesses and workers trying to negotiate an employment contract.