by Chap Petersen
In the 2020 legislative session, the General Assembly – with a new Democratic majority – passed A LOT of bills regarding labor rights. One of the most important and least noticed was SB 840, which protected “low wage” workers, i.e. those making under the average state wage, from being subject to “covenants not to compete.”
The definition of “covenant not to compete” was broad:
“A covenant or agreement between an employer or employee that restrains, prohibits or otherwise restricts an individual’s ability, following the termination of the individual’s employment, to compete with his former employer.”
The purpose of the bill was to make sure that lower-level service workers were not tied down by onerous post-employment restrictions, but could start their own business or work for a competitor without fear. The only restriction was laid out in Section C of the bill, which preserved non-disclosure agreements relating to confidential information.
It was an excellent idea. (The sponsor btw was Bill DeSteph, R-VA Beach). I liked it so much I added a floor amendment that employees who successfully enforced the law would be entitled to attorney fees.
Three years later, I found myself representing a worker in a security firm making $50,000 a year. He judged (correctly) that he could do a better job on his own. He started a company and was immediately served with a 50-page, 10-count lawsuit by his former employer and its Big Law Firm, which sought to shut him down via a non-compete agreement.
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