EMPLOYMENT AGREEMENTS

Q. Are employment agreements containing covenants not to compete enforceable in Virginia?

A. Effective July 1, 2020, Va. Code §40.1-28.7:8 prohibits employers  from entering into, enforcing, or threatening to enforce,  a covenant not to compete entered into on or after July 1, 2020,  with any “low-wage employee” as defined by the  Act.    Employees whose earnings are derived in whole or predominant part from sales commissions, incentives or bonuses are excluded from the definition of  “low-wage employees”  who generally make less than approximately Fifty Thousand Dollars ($50,00.00) annually. The Act further provides that covenants not to compete shall not restrict an employee from providing a service to a customer of the employer if the  employee does not initiate contact with or solicit the customer.

Employers who violate this provision are subject to a civil penalty  and the Act allows employees to bring a civil action against the employer.  Finally, the Act requires that employers post a copy of the section at the work location.

For those covenants not to compete not subject to Va. Code §40.1-28.7:8, each agreement stands or falls on the specific language used in the contract. The Virginia Supreme Court has recognized both the validity and enforceability of such covenants in certain situations. The Court applies a balancing test to ensure that legitimate interests of the employer are protected while not unduly restricting the ability of the employee to earn a livelihood. Therefore, the agreement should be drafted and/or reviewed by an attorney familiar with such covenants.

ESTATE PLANNING

Q. What documents do I need for proper estate planning?

A. At a minimum, every individual should consider having an Advanced Medical Directive, a Power of Attorney, and a Last Will and Testament.  The first two documents take care of needs expected to arise during your life and the last, upon your death. The Advanced Medical Directive is a variation of the Living Will and designates an individual to make health care decisions for you under designated circumstances. The Power of Attorney, which terminates upon your death, designates an individual to act on your behalf and can be as limited as you would like. Finally, the Last Will and Testament, effective upon your death, appoints an individual as Personal Representative to carry out your wishes as to the disposition of your estate.

Some individuals  also consider a Revocable Living Trust, in conjunction with a Will, to avoid probate, disclosure of assets, and/or treatment of beneficiaries. The Revocable Living Trust allows  access to the assets during your lifetime and provides for a disposition of the  Trust  assets upon your death.

One other document which you might want to consider is a Burial Power of Attorney. Virginia law permits an individual to designate another person who accepts the responsibility to have full and complete authority to make all of the arrangements for the burial or disposition of the individual’s remains.The costs incurred are expenses of the estate, to be reimbursed by the personal representative.

Each of these documents bestows certain powers upon an individual that you name to carry out your wishes, whether it be an attorney-in-fact or a personal representative. Therefore, you should take into account the abilities, the commitment, and the trustworthiness of the person to perform the designated duties in selecting him or her. In addition, you should consider naming another individual as an “alternate” in the event that your first choice is unable or refuses to serve for whatever reason.

DOMESTIC RELATIONS

Q. How is the amount of child support determined in Virginia?

A. Virginia has adopted specific guidelines to determine the presumptively correct amount of child support.The basic child obligation is calculated based upon the parents’ combined gross income (which may be adjusted for other children born of different relationships) and the number of children for whom support is being sought. If either parent incurs additional expenses such as health insurance, work related day care expenses, and certain extraordinary medical expenses, the basic child support obligation will be increased. The resulting amount is then pro-rated according to the percentage of income for each parent to determine the amount of the obligation. Deviations may be made under certain circumstances.

BUSINESS FORMATION

Q. I operate a business as a sole proprietor. Should I incorporate?

A. Incorporation, whether as a corporation or a limited liability company, can provide protection of individual assets from liabilities associated with the operation of the business. The process of incorporation or registration of a limited liability company is generally quick. You should consult with an attorney concerning the specific circumstances of your business to determine the appropriate type of entity.

This discussion is not intended to provide legal advice nor does the viewing of this discussion create an attorney-client relationship. You should consult with an attorney of your choosing if you have any specific questions requiring legal advice.

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