Wednesday, March 19, 2008

A new twist in noncompete cases

Noncompete cases always seem to generate a great deal of interest when we feature them in the paper.

This week, we got a case that has a new twist. It was decided by Virginia Beach Circuit Judge Joe Canada.

The case involves three guys who partnered to start a martial arts studio.

Their cooperative agreement featured a clause that required two of them to pay a penalty for breaching the agreement with the third. If the two guys started their own martial arts school, without giving the third guy an opportunity to participate, they agreed to pay him $15,000.

Not surprisingly, the two guys did just that and the third guy sued, seeking $750,000.

Judge Canada found that while the clause did not neatly fit the definition of a noncompete clause, it nonetheless was valid and enforceable as a covenant not to compete.

To get a free copy of the full-text opinion in Miran v. Merullo, Today’s Top Opinion, please visit the Virginia Lawyers Weekly home page,

No comments: