The Same Employer But a Different Result in this Virginia Supreme Court Case Regarding the Enforceability of Noncompete Agreements
Over the course of the past 20 years, the Virginia Supreme Court has tweaked the law governing non-compete agreements. In its latest case, the Court came full circle by invalidating a noncompete agreement that used the same language the Court had upheld 20 years earlier in a case involving the same company.
As we have written before, trial courts will enforce noncompete agreements when the agreements (1) are narrowly drawn to protect the employer’s legitimate business interest, (2) are not unduly burdensome on the employee’s ability to earn a living, and (3) are not against public policy. Importantly, the employer has the burden to prove each of these elements. When evaluating whether the employer has met that burden, trials courts should consider the “function, geographic scope, and duration” elements of the noncompete restrictions. These elements are “considered together” rather than “as three separate and distinct issues.”
Further, if the noncompete agreement is too broad or otherwise unenforceable, a Virginia court will not rewrite, or “blue pencil” the agreement to make it enforceable. Therefore, it is important that you work with your business attorney to draft an enforceable non-compete agreement.
The Proposed Tax Legislation and You
In S8721, S. Amend.4753 amending H.R.4853, there is some good news with respect to the long in limbo future of federal estate and gift tax legislation for taxable years beginning after December 31, 2010. Further, it appears that the estate and gift tax amendments are likely to pass both houses of Congress this year, though nothing is certain in the current legislative environment.
Under the proposed legislation, the amount of a decedent’s taxable estate excludable from estate tax would be $5 million. For years beginning in 2012, the exclusion amount would be indexed for inflation. While the provisions of the proposed legislation will sunset with the entirety of the proposed tax package, this time as of December 31, 2012, the inflation index provisions as to these provisions may be an indication that there exists some consensus that the estate and gift tax components of the current tax bill may represent appropriate long-term policy.