On November 4, 2011, the Circuit Court of Fairfax County, in Home Paramount Pest Control Co. v. Shaffer, explicitly overruled its 1989 decision in Paramount Termite Control Co. v. Rector, holding unenforceable the same non-compete language it had previously enforced. The court noted that stare decisis is not “an inexorable command,” and “was never meant to prevent a careful evolution of the law.”
The court examined the following non-compete provision in the employment agreement between plaintiff Home Paramount and its former employee Justin Shaffer:
The Employee will not engage directly or indirectly or concern himself/herself in any manner whatsoever in the carrying on or conducting the business of exterminating, pest control, termite control and/or fumigation services as an owner, agent, servant, representative, or employee, and/or as a member of a partnership and/or as an officer, director or stockholder of any corporation, or in any manner whatsoever . . .
In Virginia and many other jurisdictions, the enforceability of a non-compete provision is a question of law in which the court closely examines the provision to determine if it is narrowly drawn to protect the employer’s legitimate business interest, is not unduly burdensome on the employee’s ability to earn a living, and is not against public policy. The court considers as a whole the extent of the provision’s restrictions on employment activities; the geographic scope of the restrictions; and the duration of the restrictions.
The court held in Home Paramount that the provision was overly broad because it sought to prohibit Shaffer from working for a competitor in any capacity. This made the entire non-compete unenforceable. The court found:
. . . [V]alid provisions prohibit “an employee from engaging in activities that actually or potentially compete with the employee’s former employer.” Omniplex World Services,270 Va. at 249, 618 S.E.2d at 342 (emphasis added). But a former employee may find new employment with his former employer’s competitor in which he engages exclusively in activities that do not compete with the former employer. . . . When a former employer seeks to prohibit its former employees from working for its competitors in any capacity, it must prove a legitimate business interest for doing so.
. . . On its face, [the non-compete provision] prohibits Shaffer from working for Connor’s or any other business in the pest control industry in any capacity. It bars him from engaging even indirectly, or concerning himself in any manner whatsoever, in the pest control business, even as a passive stockholder of a publicly traded international conglomerate with a pest control subsidiary. The circuit court therefore did not err in requiring Home Paramount to prove it had a legitimate business interest in such a sweeping prohibition.
Since the court found the non-compete provision overbroad and therefore unenforceable, it did not examine any evidence of the former employee’s purported unfair competition following his tenure at Home Paramount.