Last month, in Assurance Data, Inc. v. Malyevac, (Va. Sept. 12, 2013), the Supreme Court of Virginia published an opinion holding that a trial court cannot decide on demurrer whether restrictive covenants in employment agreements are overbroad and thus unenforceable if an employer argues in opposition to the demurrer that it intends to produce factual evidence to demonstrate reasonableness.
This opinion represents a significant shift from previous Virginia Supreme Court precedent standing for the proposition that trial courts may sustain demurrers to claims for breaches of restrictive employment covenants without allowing the Plaintiff the opportunity to introduce additional evidence. See Modern Environments, Inc. v. Stinnet, 263 Va. 491, 561 S.E.2d 694 (2002); Home Paramount Pest Control Cos. V. Shaffer, 282 VA. 412 (2011).
The opinion also represents a significant victory for employers as regardless of the facial scope of their restrictive covenants departing employees are now faced with the prospect of prolonged, expensive litigation and discovery should their ex-employer sue. Moreover, employers no longer face the risk of a trial court determining at the demurrer stage that their template restrictive covenants, also in place with respect to current employees/nonparties, are facially unenforceable as a matter of law across the board.
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