By Rebecca Woods

Although Virginia is already generally hostile to non-competition agreements, enforcing only those that are very limited in function, geographic scope, and duration, a bill has been proposed in the 2012 session of the Virginia General Assembly that would severely restrict the enforceability of non-compete agreements. House Bill 1187 proposes to add to the Code of Virginia a provision that, with limited exceptions, would deem unlawful “any contract that serves to restrict an employee or former employee from engaging in a lawful profession, trade, or business of any kind.” The limited exceptions would only allow businesses, partners in a partnership, or members of a limited liability company to agree to refrain from carrying on similar business in the area in which it or they had been conducting such business. The bill excepts from its coverage nondisclosure agreements intended to prohibit the sharing of certain information such as trade secrets and proprietary or confidential information.

The effect of the bill, if passed, would be to invalidate all employee non-compete agreements. Proponents of the bill claim it would transform Virginia into an entrepreneur haven like Silicon Valley. Opponents have not yet made public pronouncements, but it is generally expected that business interests will lobby against the bill.