Fame v. Allergy & Immunology, P.L.C.
2015 Va. Cir. LEXIS 107, 91 Va. Cir. 66 (2015)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
A non-competition covenant in an employment agreement is unenforceable in Virginia if it is ambiguous and at least one reasonable interpretation is overbroad, prohibits the employee from performing functions he was not engaged in for the employer, or is unduly harsh in curtailing the employee's ability to earn a living.
Facts:
- Dr. Thomas Fame is a board-certified allergist and immunologist who has lived and practiced in the Roanoke Valley area for twenty-three years.
- In 2010, Dr. Fame began working for Allergy & Immunology, P.L.C. (A&I) as a Staff Physician.
- On February 1, 2011, Dr. Fame signed a Nonmember Employment Agreement (NEA) which was made retroactive to his start date.
- The NEA contained a restrictive covenant prohibiting Dr. Fame from competing with A&I for two years within a large specified geographic area upon termination.
- The covenant also prohibited Dr. Fame from being connected in any way with the ownership, management, operation, or control of a competing practice.
- During his employment, Dr. Fame's duties were solely as a treating staff physician; he had no partnership or management responsibilities at A&I.
- On May 1, 2015, A&I terminated Dr. Fame’s employment.
Procedural Posture:
- Dr. Thomas Fame sued Allergy & Immunology, P.L.C. (A&I) in a Virginia Circuit Court (the trial court of first instance).
- Dr. Fame sought a declaratory judgment that the non-competition covenant in his employment agreement was unenforceable.
- Dr. Fame also filed a motion for a temporary injunction to prevent A&I from enforcing the covenant during the litigation.
- The trial court denied the motion for a temporary injunction, finding that Dr. Fame had not yet established a likelihood of success on the merits.
- The case then proceeded to a hearing on the merits for a permanent injunction and declaratory judgment.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Is a non-competition covenant in an employment agreement unenforceable if it is ambiguous, functionally overbroad by prohibiting activities the employee never performed for the employer, and unduly harsh on the employee's ability to earn a living?
Opinions:
Majority - Judge Charles N. Dorsey
Yes. The non-competition covenant is unenforceable because it is overbroad and unduly burdensome. Virginia law disfavors restrictive covenants, and to be enforceable, they must be narrowly tailored to protect the employer's legitimate business interests, not be unduly harsh on the employee, and not violate public policy. The covenant here fails because its geographic scope is ambiguous; it is unclear whether it prohibits Dr. Fame from practicing within the territory or from treating any patient from the territory. As one reasonable interpretation is clearly overbroad, the entire clause is unenforceable. Furthermore, the covenant is functionally overbroad because it prohibits Dr. Fame from managing or operating a competing practice, activities he never performed for A&I. Finally, enforcing the covenant would be unduly harsh, forcing a long-time resident to either change his profession or relocate, which unreasonably curtails his ability to earn a living.
Analysis:
This decision reinforces the high standard employers in Virginia must meet to enforce non-competition agreements. It underscores that any ambiguity in a restrictive covenant will be construed against the employer and can be fatal to the entire clause if any reasonable interpretation is overbroad. The case also solidifies the principle that functional restrictions must be narrowly tailored to the employee's specific duties, preventing employers from using boilerplate language to prohibit former employees from taking on roles they never performed. This provides clear guidance for future litigation, emphasizing that precision in drafting is critical and that courts will protect an employee's ability to earn a livelihood in their established community from overly oppressive restrictions.
