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Virginia Circuit Court Strikes Down Noncompete As “Inherently Overbroad”

Published by on March 17, 2011

A Virginia Beach Circuit Court struck down a noncompete agreement entered into between a medical company and a nurse practitioner who left the company to start her own clinic.  The company filed suit to enforce the noncompetition and nonsolicitation clause of the agreement.  More after the break. The noncompete provision prohibited the nurse from performing […]

A Virginia Beach Circuit Court struck down a noncompete agreement entered into between a medical company and a nurse practitioner who left the company to start her own clinic.  The company filed suit to enforce the noncompetition and nonsolicitation clause of the agreement.  More after the break.

The noncompete provision prohibited the nurse from performing the types of services that she performed for her former company, directly or indirectly, as an “agent, officer, director, member, partner, shareholder, independent contractor, owner or employee.”  The court held that the shareholder prohibition was “inherently overbroad.”  The court reasoned that under the language as written, the defendant would be barred from owning stock in a publicly traded company if some part of that company provided the same medical services as her former company, which could include companies that were not competitors.  The agreement also failed to define “medical services” or what constitutes “indirect” performance of services so as to put the defendant on notice as to what services she could perform within the parameters of the agreement. 

Similarly, the court found that the nonsolicitation provision of the agreement was overbroad.  That provision stated that the defendant could not solicit any employee of the company “for any reason whatsoever, or to hire any such individual” during the 12 months prior to the defendant’s separation of employment.  The court held that the language was “unlimited as to location or function” and that the company “lacked a legitimate interest for preventing a prior employee from soliciting or hiring employees internationally and for any occupation whatsoever.”

The Virginia Lawyers Weekly article on this opinion can be found here.

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