Do I have to sign a non-compete to keep my job?
In order for a contract to be enforceable under Virginia law, it must be secured by consideration, a legal term for something of value offered in exchange for the employee’s promise not to compete.
So is “keeping your job” sufficient consideration under Virginia law to make a non-compete contract enforceable?
The answer is “Yes.” Most employers will provide no incentive to sign the non-compete, except, of course, “sign this non-compete, or else.” Basically, the employee must sign the non-compete contract to keep their job, and under Virginia law, that is sufficient consideration.
Employees have argued, without much success, that a “take it or leave it” offer renders the contract unenforceable for other reasons. For example, contracts signed under duress are unenforceable.
But Virginia courts, for now, have been unpersuaded that non-compete contracts signed as a condition of employment are insufficient. Keeping your job is enough to form a binding offer and acceptance and creates a valid contract.
Despite the law that “keeping your job” is sufficient consideration for the non-compete, there are some employers, including many companies that we advise, that take a different approach. These companies will provide monetary compensation or other extra benefits to secure the non-compete contract.
In my opinion, it makes sense to offer a non-compete as a stipulation of employment for new hires. However, for current employees, the best approach is to offer something of value in exchange, such as a monetary bonus. That way, employees are more likely to sign-up, courts are more likely to enforce the agreements terms, and best yet, employees are more likely to comply if they get something in return.
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