Virginia Federal Court: 'Twiqbal' Standard Doesn't Apply To Affirmative Defenses
An Alexandria, Virginia federal court judge has held that the heightened pleading requirements under the so-called ‘Twiqbal’ cases do not apply to affirmative defenses.
Virginia Supreme Court Grants Appeal in Noncompete Case
The Virginia Supreme Court recently granted a writ of appeal in a noncompete case from the Fairfax County Circuit Court. In Home Paramount Pest Control Companies, Inc. v. Justin Shaffer, the issues before the Court include whether the lower court erred in finding the noncompete overly broad. In finding the noncompetition agreement unenforceable, the Fairfax Circuit Court considered the scope of the restricted activities, but did not consider the portion of the agreement in light of the narrow geographic scope of the restriction which applied only to certain limited geographic boundaries within Fairfax County.
Noncompetition agreements in Virginia are strictly construed against the employer, but a court will enforce the parties’ agreement if it is reasonable and narrowly tailored to protect the legitimate business interests of the company. In assessing the enforceability these types of restrictive covenants, Virginia courts scrutinize three aspects for reasonableness: (1) duration of the restriction; (2) geographic scope of the restriction; and (3) breadth of the restricted activities.
In Virginia, the enforceability of noncompetes is governed by common law principles (i.e., case law and precedent). Thus, the body of law on this subject is constantly evolving with each new court decision. The Virginia Supreme Court’s decision in this matter will shed further light on employer's ability to restrict post-employment activities of its workers.
As we have discussed previously, simply having an agreement in place may not properly protect a Virginia business from competition by a former employee. To be upheld under Virginia law, the non-compete agreement must be drafted in accordance with Virginia court case precedent.
Business Disputes Cases Amongst Leaders on List of Largest Virginia Jury Verdicts in 2010
According to a Virginia Lawyers Weekly survey on the largest Virginia jury verdicts in 2010, verdicts in business disputes lawsuits claimed three of the top four positions.
The top Virginia jury verdict in 2010 was awarded by an Alexandria federal court jury for $26 million in the case of In Re: Outsidewall Tire Litigation. In this case, a tire-mining inventor prevailed in a lawsuit in which he alleged that a Chinese tire manufacturer and a Dubai tire distributor conspired to steal trade secrets and infringe on the inventor’s copyrights and trademarks.
In third place on the survey was the case of Humanscale Corp. v. CompX International, Inc., in which two leading companies in the field of ergonomic office products accused each other of patent infringement with respect to keyboard support systems. A Richmond federal court jury awarded the defendant $19 million in past damages and a royalty of 6% of future sales on the defendant’s counterclaims.
Coming in fourth place on the list of the top Virginia jury verdicts of 2010 was the matter of Perot Systems Government Services Inc. v. 21st Century Systems Inc. In this business case, which was tried in state court, the plaintiff alleged that two of its former employees copied confidential information when they joined the defendant company’s new government contracting division. A Fairfax County jury awarded the plaintiff $14.12 million for the defendants’ breach of fiduciary duty, breach of a non-disclosure agreement, breach of a non-solicitation agreement, tortious interference with a contract, violation of the Virginia Computer Crimes Act, violation of the Virginia Business Conspiracy Act, common law conspiracy, violation of the Virginia Uniform Trade Secrets Act, and conversion.
To participate in the Virginia Lawyers Weekly survey, the verdict must have been: for at least $1 million; returned by a jury in Virginia (not a judge); and during the calendar year 2010. In total, there were 22 Virginia court cases included on the survey, of which 16 of the verdicts were personal injury actions.
Employee Must Pay Employer's Attorney's Fees in Retaliation Suit
In a case with some odd facts, and an even stranger theory of liability, an Eastern District of Virginia Court found that an employee’s claims were “frivolous, groundless, and unreasonable,” and assessed the costs of the litigation, including the employer’s attorney’s fees, against the employee.
The case, Basinger v. Hancock, Daniel, Johnson & Nagle, P.C., involved plaintiff Judith Basinger’s claim that she was retaliated against and fired from her job as a legal secretary based upon her involvement in a sexual harassment complaint at the law firm where she worked. The defendant law firm (“Hancock”) employed an associate named Paul Walkinshaw (“Walkinshaw”). Apparently, over the course of a several months, Basinger made several advances toward Walkinshaw, including inviting him on a number of occasions to meet her after work and to go for a drink with her after normal work hours. She told him, via e-mail, that she hoped there would be a right time and place when they could “get together.” Walkinshaw, who was some twenty years younger than Basinger, complained to his supervisor and Hancock’s human resource department regarding Basinger’s behavior and her harassing e-mails. After investigation, and complaints about Basinger continuing to work in Hancock’s Fairfax office, the firm offered her a job transfer to its Richmond office. When she declined the transfer, Hancock terminated Basinger’s employment.
For some unknown reason, based upon these facts, Basinger actually filed a lawsuit against Hancock claiming she was retaliated against under Title VII of the Civil Rights Act of 1964 for opposing unlawful conduct in the workplace and for participating in the investigation of such unlawful conduct. The Court granted Hancock summary judgment as Basinger never complained to her employer that she was being sexually harassed, and her only “participation” regarding sexually harassing conduct was when she was interviewed by Hancock’s HR department for her alleged sexually harassing behavior.
Hancock also sought payment of its attorney’s fees and costs for defending the lawsuit. After reviewing the legal standard set out by the applicable caselaw, the Court found that the defendant law firm was entitled to recover its attorney’s fees and costs for defending the case because Basinger’s lawsuit “was based on a blatant misrepresentation of events, and totally lacking in evidentiary support.” Op. at 4-5. As such, the defendant was awarded $25,650 in attorney’s fees and $2,586.84 in costs.
Writ Granted in Fairfax Non-Compete Case
In a case that may further shape the landscape of non-compete cases in Virginia, the Virginia Supreme Court granted today a writ of appeal in a case involving a former employee of a pest control company that was subject to a non-competition agreement when he went to work for a competitor.
The case, Home Paramount Pest Control Companies v. Shaffer, et al., involves a former employee, Justin Schaffer, of Home Paramount Pest Control that was subject to a non-compete which restricted his future employment in terms of working for a competitor. The geographical restriction for the non-compete was limited to Fairfax County; however the work restriction limited the employee from working for a competing pest control company “in any manner whatsoever.” Despite claims from Home Paramount that Schaffer was attempting to get business from commercial customers he worked with while at Home Paramount, the Fairfax Circuit Court found the restriction to be overbroad and ruled in favor of the former employee. The Virginia Supreme Court has now granted a writ with respect to three assignments of error to review the decision of the lower court.
IRS Announces Standard Business Mileage Reimbursement Rate for 2011
Employers should take notice that the Internal Revenue Service (IRS) has announced a standard business mileage reimbursement rate of 51 cents per mile for 2011. The business mileage reimbursement rate is used by many employers for computing the appropriate employee reimbursement amount in instances where an employee uses a personal vehicle for a work-related purpose. The new mileage reimbursement rate, which takes effect on January 1, 2011, represents a slight increase from the rate set by the IRS in 2010 of 50 cents per business mile driven.
Employers with an established personnel policy should update their employee handbooks by year-end to reflect this change. Those employers who do not have an established policy for reimbursing employees for business miles traveled in personal vehicles should consider instituting a mileage reimbursement policy for 2010 and adopting a good mileage log reimbursement form for employees.
Employers should consult the IRS website for more information on the mileage reimbursement guidelines.
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