Virginia Supreme Court Archives - Walsh Colucci Lubeley Walsh

Walsh Colucci Wins in Virginia Supreme Court to Prevent Prince William County from Dissolving a 50 Year Volunteer Company and Confiscating Its Assets

Posted on October 26, 2020October 27, 2020 by Brigitte Flores

The Virginia Supreme Court sided with those amazing men and women who volunteer their time as EMS and fire fighters protecting their community. When the Prince William County Board of Supervisors decided to terminate its contract with Dumfries Triangle Rescue Squad (DTRS) after more than 50 years of its volunteer services, the Board also attempted to dissolve DTRS’s corporate status and directed DTRS to give its property, including real estate the Board valued at more than $1.6 million, to the County for free. When the Prince William Circuit Court concluded that the Board had the power to do so, Walsh Colucci filed an appeal with the Virginia Supreme Court to reverse this error.

On October 22, 2020, the Virginia Supreme Court did just that, and unanimously ruled that the Board did not have the authority to dissolve the corporate status of DTRS or take its property. Matt Westover and Garth Wainman successfully argued the case before the Court.

For more than half a century, volunteer organizations like DTRS have saved the taxpayers of Prince William County millions of dollars by providing volunteer EMS and fire rescue services to the residents of the county. In 2017, when its volunteer staffing numbers dropped, the Board terminated its contract with DTRS and ordered it to give all of its property to the County. While DTRS did not challenge the Board’s termination of its contract to provide EMS services in the County, it did not agree to the dissolution of its corporate status or the forfeiture of its property. When DTRS refused to give its property to the County, the Board filed a lawsuit against DTRS to force it to do so. During the case, DTRS agreed to let the County continue to use the property for free while the matter worked its way through the legal system.

After more than two years of litigation, the Supreme Court ruled that the Board could neither force DTRS into liquidation nor take its property. The Court’s decision protects not only DTRS, but also numerous other companies who provide volunteer EMS services throughout the Commonwealth against overreach by local governing bodies.

Walsh Colucci is honored to represent DTRS and several other volunteer fire and rescue companies throughout the region whose members selflessly protect Virginians all throughout the Commonwealth. If you are a member of a volunteer EMS agency or fire company in the Commonwealth and have any questions regarding the Court’s decision and how it may impact your company, please feel free to call Garth Wainman or Matt Westover at (703) 680-4664.

Emergency Legislation Passed in Response to the Virginia Supreme Court’s Decision in The Game Place

Posted on March 20, 2019March 25, 2019 by The Land Lawyers

On February 13, 2019, Governor Northam signed into law legislation that eliminates the potential adverse consequences of the Virginia Supreme Court’s 2018 decision in The Game Place, L.L.C. v. Fredericksburg 35, LLC and that should have landlords and tenants breathing a sigh of relief. In that case, the Court held that a lease for a term longer than 5 years must be sealed or in the form of a deed in order to comply with Virginia’s Statute of Conveyances (Virginia Code § 55-2). A lease that did not comply with that statue could be repudiated by either the landlord or tenant, regardless of how long the parties had operated under the mistaken belief that their written lease was valid, creating an implied tenancy based on the manner in which rent was received (usually a month-to-month tenancy). The Court’s decision sent landlords and tenants scrambling to review their leases to determine whether they complied with the Statute of Conveyances. In many cases, they did not and parties began negotiating lease amendments to resolve the issue.

Legislation was introduced this year to address the consequences of The Game Place decision. The new law amends several provisions of the Virginia Code, including the Statute of Conveyances, and eliminates the need for a lease for more than 5 years to be sealed or in the form of a deed. The law applies not only to new leases, but also to existing leases that had not been repudiated by either party. If an existing noncompliant lease had not yet been repudiated by either the landlord or tenant, they have likely lost their ability to do so under the new law. Because of the number of leases potentially affected by the Court’s decision, the General Assembly concluded that an emergency existed and made the law effective immediately upon the Governor’s signature.

If you have any questions regarding the legislation and its impact on a specific lease, please contact Matt Westover at (703) 680-4664.

The full text of House Bill 2287 can be found here.

Is My Non-Compete Agreement Enforceable?

Posted on February 13, 2017December 19, 2018 by Garth Wainman

Source: Susan Lynch

The popularity of non-compete agreements in Virginia has increased substantially over the years. Such agreements prohibit a former employee from competing against his or her former employer for a period of time after the termination of employment. Although increasingly common, covenants not to compete are frequently a source of expensive and time-consuming litigation, and the law is constantly evolving.

We are routinely involved in such cases, both on behalf of employers trying to enforce the agreements and former employees trying to avoid them. The outcome of the litigation will often turn on whether the agreement is enforceable.

Under Virginia law, non-compete agreements are enforceable if they are narrowly drafted to protect a legitimate business interest, not unduly burdensome on the employee’s ability to earn a living, and not against public policy. The burden of proof is on the employer seeking to enforce the agreement to prove that it is reasonable.

In order to determine reasonableness, Virginia courts evaluate three aspects of the restriction: its duration, its geographic scope, and the breadth of the activity being restricted (the “functional scope”). The elements are considered collectively, rather than individually. Thus, a two-year limitation found reasonable in one case might be unreasonable in another case depending on the scope of the other restrictions.

Duration. Generally, an enforceable non-compete agreement must have a limited duration because Virginia courts will protect a former employee’s right to make a living in his or her chosen field. Unfortunately, there are no black-and-white rules regarding when a duration is reasonable because it must be considered together with the geographic scope and functional scope limitations. Virginia courts have upheld agreements that restrict competition for one and even two years or more in certain cases.

Geographic Scope. Covenants not to compete must also be limited in geographic scope. Generally, employers can only restrict competition within the area they do business. For example, if 90% of a company’s business is within 25 miles of the main office and the employer requires a 50-mile non-compete radius upon termination, expect it to be struck by the courts.

Restricted Activities/Functional Scope. An employer must be careful to only limit a former employee from performing work for a competitor that actually competes with its company. If done correctly, a company can prevent its sales manager from working in the same type of sales for a competitor in its region; however, the company likely cannot prevent the employee from working in the competitor’s IT department. Any attempt to prevent an employee from working in “any capacity” for a competitor will likely be struck down as unreasonable and overbroad regardless of what work the former employee actually does.

When construing a non-compete agreement, any benefit of the doubt will be given to the employee, so the language of the agreement is critical. If a court concludes that a provision of a non-compete agreement is unenforceable, it will not rewrite or remove that provision. Instead, it will invalidate the entire agreement. This result would undermine the validity of all similar agreements a company might have with its other employees. All the more reason to not overreach when drafting them.

Non-compete agreements are not for everyone. They should be used only for key personnel, such as head salespeople, officers, directors, marketing personnel, and other employees involved in critical aspects of a company’s business. Non-solicitation agreements, which protect a company’s clients and/or employees from being poached by former employees, are also a useful tool and generally are more easily enforced.

Because the law is constantly changing, we recommend employers routinely have their agreements reviewed to make sure they are enforceable. In 2011, the Virginia Supreme Court struck as overly broad a non-compete agreement that was identical to one it had upheld as reasonable for the same employer in 1989.

Please feel free to contact Garth Wainman to discuss any questions you may have regarding whether non-compete and/or non-solicitation agreements are appropriate for your business. We would be happy to review any of your existing agreements for compliance with current law.