Recent Virginia Supreme Court Decision Marks a Steady Shift in the Law Governing Noncompete Agreements

On November 4, 2011, the Virginia Supreme Court issued a decision in Home Paramount Pest Control Cos. v. Shaffer, in which the Court found a covenant not to compete in an employment agreement to be overbroad and unenforceable. In so doing, the Court overruled its own 1989 decision in Paramount Pest Control Co. v. Rector, which upheld a virtually identical agreement. Coincidentally, Home Paramount (the losing party in this new case) is the successor in interest to Paramount Pest Control, the prevailing party in the 1989 case.

Justin Shaffer worked for Home Paramount as an exterminator before quitting in July 2009 and joining a competitor shortly thereafter. Six months prior to quitting, Shaffer had signed an employment agreement containing a noncompete provision. The provision prohibited Shaffer from "engag[ing] indirectly or concern[ing] himself in any manner whatsoever" in the pest control industry "as an owner, agent, servant, representative, or employee, and/or as a member of a partnership and/or as an officer, director, or stockholder of any corporation, or in any manner whatsoever." The specified limitations applied only to the cities or counties in which Shaffer performed services for Home Paramount and were set to expire two years following the termination of his employment.

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