Omnisec Int’l Investigations Inc. v. Stone

In the parties’ employment agreement, the non-solicitation of customers/clients clause is enforceable. Because it protects the employer’s legitimate business interest and is not unduly burdensome on the employee’s ability to earn a living, it is a valid restraint on trade. However, the non-compete provision of the non-disclosure clause is not enforceable, and the court will sever it from the agreement.

As an initial matter, at the plea in bar stage, the employer has the burden to prove that a challenged restrictive covenant 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. It is not the burden of the employee to demonstrate the unreasonableness of the restrictive covenants.

Despite a perpetual bar on non-disclosure, this prohibition does not impair the employee’s ability to earn a living. But while Omnisec has a legitimate business interest in preventing the disclosure of confidential and third-party information, the non-compete provision of the non-disclosure clause is not narrowly drawn. The employee can’t know which potential future employment “likely will result in the use or disclosure, even if inadvertent.”

Moreover, the bar is perpetual, and it’s a bridge too far to restrict an employee’s future employment in perpetuity with a restriction pursuant to which the employee can’t know which potential future employment she may undertake because she can’t know which future employment likely will result in the use or disclosure, even if inadvertent.

As to non-solicitation, however, the employee worked only in a specific area for Omnisec, i.e. security clearance background investigations for federal agencies, so the restriction is effectively limited to a specific area of competition. And because she did only security clearance background investigations for federal agencies, the restriction is effectively limited to her past activities and to activities in which she was specifically engaged.

Further, the restraint here is limited to customers or clients, or potential customers or clients, that the employee solicited, called upon, conducted business with, became aware of, or identified as a potential customer or client during her employment.

Approximately nine entities qualify as a “Restricted Entity,” so the employee could work directly for, or even solicit for another entity, the FBI or the State Department. She could also work directly for, or even solicit for, any bank or other commercial client, or even any of the 49 state governments and numerous local governments for which Omniplex performed no work.

Plea in bar granted in part and denied in part.

Omnisec Int’l Investigations Inc. v. Stone, No. CL18-6368, Mar. 26, 2019. Fairfax (Gardiner).



Categories: Opinions, Virginia Circuit Courts

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