Virginia Supreme Court Further Narrows Non-Compete Covenant Enforceability

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In Home Paramount Pest Control Cos. v. Shaffer, No. 101837, 2011 Va. LEXIS 222 (Nov. 4, 2011), the Virginia Supreme Court ruled that a covenant not to compete was overbroad and unenforceable, even though it was identical to a covenant the court had upheld 22 years earlier in Paramount Termite Control Co. v. Rector, 238 Va. 171 (1989). Acknowledging this, the court expressly overruled its holding in Paramount Termite.

Shaffer represents the culmination of 20 years of narrowing the enforceability of restrictive covenants in Virginia. In overruling Paramount Termite, the court’s ruling both confirms and reflects this major shift in the law governing non-compete covenants in Virginia.

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