Employee Non-Compete Agreement and Enforceability Memo — West Virginia

WEST VIRGINIA Employee Non-Compete Agreement and Enforceability Memo

Quick-Reference Summary

Part A — Enforceability Memo

TO: [Hiring Manager / General Counsel]
FROM: [Drafting Attorney]
RE: Enforceability of Proposed Non-Compete — West Virginia Employee
DATE: [__/__/____]

1. Threshold — Is the Employee a Physician?

If the employee is a physician, W. Va. Code § 47-11E-2 (the "Physicians Freedom of Practice Act") imposes mandatory caps:

Any physician non-compete that exceeds these caps violates the statutory limits. Section 47-11E-2 is a limitation rather than a categorical ban, but compliance with the caps does not itself establish enforceability under every other applicable rule.

2. Common-Law Reasonableness Test (Non-Physician)

Reddy v. Community Health Foundation of Man, 171 W. Va. 368, 298 S.E.2d 906 (1982); Voorhees v. Guyan Machinery Co., 191 W. Va. 450, 446 S.E.2d 672 (1994); Wood v. Acordia of West Virginia, Inc., 217 W. Va. 406, 618 S.E.2d 415 (2005).

3. Reformation / Narrowing

West Virginia does not apply a categorical rule that every overbroad covenant will be rewritten. Under Reddy, a covenant that is unreasonable on its face may fail at the threshold. If the covenant is inherently reasonable and the employer proves a protectable interest, the employee may still show that the employer can be equally protected by a narrowed covenant. Drafting must therefore stand on its own; narrowing is a fact-dependent defense and remedy, not a guaranteed rescue.

4. Antitrust Overlay

W. Va. Code § 47-18-3 makes contracts and combinations in restraint of trade unlawful, while Reddy explains that a supported, ancillary covenant that is reasonable and consistent with the public interest is not unlawful merely because it restrains trade. The covenant still must satisfy the common-law rule of reason.

5. Consideration

6. Remedies

• Injunctive relief available (preliminary and permanent).

7. Recent Developments

• Physicians Freedom of Practice Act: W. Va. Code §§ 47-11E-1 through -3 remain the controlling physician-specific provisions.
• FTC Non-Compete Rule (2024): The Northern District of Texas set aside the rule in Ryan LLC v. FTC, No. 3:24-cv-00986 (N.D. Tex. Aug. 20, 2024); the FTC dismissed its appeal in September 2025. The rule never took effect.

Part B — Non-Compete Agreement

THIS EMPLOYEE NON-COMPETE AGREEMENT (this "Agreement") is entered into as of [__/__/____] (the "Effective Date"),

by and between:

EMPLOYER:
Name: [________________________________]
Address: [________________________________]
City/County, West Virginia [ZIP]: [________________________________]
(the "Company")

and

EMPLOYEE:
Name: [________________________________]
Address: [________________________________]
City/County, West Virginia [ZIP]: [________________________________]
(the "Employee")

RECITALS

WHEREAS, the Company is engaged in the business of [________________________________] in West Virginia and elsewhere (the "Business");

WHEREAS, the Company has invested in confidential information, customer goodwill, and specialized employee training that constitute legitimate protectable interests under West Virginia law (Voorhees v. Guyan Machinery; Wood v. Acordia);

WHEREAS, Employee will hold the position of [________________________________] with access to such interests;

NOW, THEREFORE, the Parties agree:

1. INDUSTRY CARVE-OUT — WEST VIRGINIA PHYSICIANS

1.1 Physician Status. Employee ☐ IS / ☐ IS NOT a physician practicing medicine in West Virginia within the meaning of W. Va. Code § 47-11E-1 et seq. (the "Physicians Freedom of Practice Act").

1.2 Statutory Caps. If Employee is a physician, then notwithstanding any contrary provision of this Agreement:

(a) The Restricted Period in Section 5 shall not exceed one (1) year following termination (W. Va. Code § 47-11E-2(a)(1));

(b) The Restricted Territory shall not exceed thirty (30) road miles from Employee's primary place of practice with the Company (W. Va. Code § 47-11E-2(a)(2));

(c) The non-compete shall be void and unenforceable if the Company terminates Employee's employment, including a termination the Company characterizes as for cause (W. Va. Code § 47-11E-2(b)).

1.3 Severability. The statutory limits in § 47-11E-2 do not affect Sections 4 (Confidential Information) or 7 (Non-Solicitation of Employees), which apply independently.

2. DEFINITIONS

2.1 "Confidential Information" means non-public proprietary or trade-secret information of the Company, consistent with the West Virginia Uniform Trade Secrets Act, W. Va. Code § 47-22-1 et seq., and the federal Defend Trade Secrets Act, 18 U.S.C. § 1836.

2.2 "Customer" means any person or entity that was a customer of the Company during the [____]-month period preceding Employee's termination, or a prospective customer with whom Employee had material contact during the same period.

2.3 "Restricted Territory" means:

☐ Option A — Physician: within thirty (30) road miles of Employee's primary place of practice with the Company at [________________________________] (per § 47-11E-2(a)(2)).

☐ Option B — Counties: the following West Virginia counties: [________________________________].

☐ Option C — Service Area: the geographic area in which Employee provided services or had material customer contact during the final [____] months of employment.

2.4 "Restricted Period" means [____] months following termination, not exceeding 12 months for physicians (§ 47-11E-2(a)(1)). For non-physician roles, counsel must select and support a duration no greater than the proven protectable interest requires.

2.5 "Competing Business" means a person or entity providing products or services substantially similar to or competitive with the Business.

3. CONSIDERATION

☐ At hire: this covenant was disclosed before acceptance and is part of the agreed exchange for employment.

☐ Mid-employment: fresh consideration of $[____] [signing/retention bonus / promotion / equity grant / other: ____], receipt and sufficiency acknowledged.

☐ At separation: severance of $[____] under a separate Separation Agreement.

4. CONFIDENTIAL INFORMATION

Employee shall not use or disclose Confidential Information except as authorized or required by law. DTSA notice (18 U.S.C. § 1833(b)): Trade-secret disclosure in confidence to a government official or attorney solely to report or investigate suspected illegal activity, or in a sealed court filing, is immunized.

5. NON-COMPETE

During the Restricted Period and within the Restricted Territory, Employee shall not, directly or indirectly:

(a) own, manage, operate, or be employed by a Competing Business in a role substantially similar to Employee's role with the Company; or

(b) provide services to a Competing Business that involve use of the Company's Confidential Information.

For physician Employees, this Section 5 is subject to and limited by W. Va. Code § 47-11E-2.

6. NON-SOLICITATION OF CUSTOMERS / PATIENTS

During the Restricted Period, Employee shall not, on behalf of a Competing Business, solicit or accept business from any Customer (or, for physicians, patient seen during employment).

7. NON-SOLICITATION OF EMPLOYEES

During the Restricted Period, Employee shall not solicit, recruit, or induce any employee of the Company to terminate their employment.

8. INJUNCTIVE RELIEF

Employee acknowledges that breach of Sections 4–7 may cause irreparable harm. The Company may seek temporary, preliminary, and permanent injunctive relief.

9. REFORMATION / NARROWING

If a restriction is not unreasonable on its face but exceeds what a proven legitimate interest requires, the Parties request that the court narrow it to the minimum extent permitted under Reddy. The Parties do not request enforcement of a facially unreasonable restraint.

10. CHOICE OF LAW / VENUE

This Agreement is governed by West Virginia law. Exclusive venue lies in the Circuit Court of [______] County, West Virginia, or the U.S. District Court for the [Northern/Southern] District of West Virginia.

11. ENTIRE AGREEMENT / COUNTERPARTS

Entire agreement. May be executed in counterparts and by electronic signature pursuant to the West Virginia Uniform Electronic Transactions Act, W. Va. Code § 39A-1-1 et seq.

EXECUTION

Part C — Pre-Signing Checklist

☐ Confirmed whether Employee is a physician (W. Va. Code § 47-11E-1 et seq.)

☐ If physician: duration ≤ 1 year (§ 47-11E-2(a)(1))

☐ If physician: geography ≤ 30 road miles from primary practice location (§ 47-11E-2(a)(2))

☐ If physician: drafted to anticipate void-on-employer-termination rule (§ 47-11E-2(b))

☐ If non-physician: reasonableness analysis under Reddy/Wood/Voorhees

☐ Legitimate business interest documented (goodwill, confidential info, trade secrets, training)

☐ Non-physician duration tied to the proven protectable interest; no invented safe harbor

☐ Geographic scope matches Employee's territory AND Company's market

☐ Scope limited to roles substantially similar to Employee's actual role

☐ Consideration and timing documented; no assumption that continued employment alone resolves a mid-employment covenant

☐ Confidentiality / NDA included (WV Uniform Trade Secrets Act § 47-22-1 et seq.)

☐ DTSA whistleblower notice included (18 U.S.C. § 1833(b))

☐ Narrowing clause tracks Reddy and does not promise rescue of a facially unreasonable restraint

☐ Antitrust analysis done (§ 47-18-1 et seq.)

☐ West Virginia choice of law and venue

☐ E-signature / counterpart language (WV UETA)

☐ Reviewed by West Virginia-licensed attorney before execution

☐ Removed all `` comments before delivery

Sources and References

• W. Va. Code § 47-11E-1 et seq. — Physicians Freedom of Practice Act
• W. Va. Code § 47-11E-2: https://code.wvlegislature.gov/47-11E-2/
• W. Va. Code § 47-18-1 et seq. — West Virginia Antitrust Act
• W. Va. Code § 47-22-1 et seq. — Uniform Trade Secrets Act
• Reddy v. Community Health Foundation of Man, 171 W. Va. 368, 298 S.E.2d 906 (1982)
• Wood v. Acordia of West Virginia, Inc., 217 W. Va. 406, 618 S.E.2d 415 (2005): https://www.courtswv.gov/sites/default/pubfilesmnt/2023-11/31863.pdf
• Voorhees v. Guyan Machinery Co., 191 W. Va. 450, 446 S.E.2d 672 (1994): https://www.courtswv.gov/sites/default/pubfilesmnt/2023-11/21693.pdf
• Weaver v. Ritchie, 197 W. Va. 690, 478 S.E.2d 363 (1996): https://www.courtswv.gov/sites/default/pubfilesmnt/2023-11/23080.pdf
• Pemco Corp. v. Rose, 163 W. Va. 420, 257 S.E.2d 885 (1979)
• Defend Trade Secrets Act, 18 U.S.C. § 1836; whistleblower immunity, 18 U.S.C. § 1833(b)
• Ryan LLC v. FTC, No. 3:24-cv-00986 (N.D. Tex. Aug. 20, 2024) (FTC Non-Compete Rule set aside; appeal dismissed Sept. 2025)