Ifrah Law Defeats Octagon Non-Compete Claims Against Client

Federal court in Virginia finds sports agency's non-compete and non-solicitation provisions overly broad under Virginia law

WASHINGTON--(BUSINESS WIRE)--Ifrah Law announced that a federal court in Virginia held the non-compete and non-solicitation provisions in sports agency Octagon's employment contract unenforceable under Virginia law.

The court’s ruling not only invalidated Virginia-based Octagon’s restrictive covenants, finding them overly broad and violative of Virginia law, but also found Octagon liable for violation of California law. In reaching this conclusion, the Court upheld and enforced California law disfavoring non-competes and requiring employers to provide notice of the violative nature of restrictive covenants within employment agreements. In light of the ruling, Octagon dismissed its remaining claim, and the court ordered that the only issue left for adjudication is the award of attorney’s fees to Ifrah Law’s client, Alexander Sohaili.

"The court has spoken: Virginia allows non-competes, but only when they are drawn narrowly enough to protect a legitimate business interest without keeping someone from earning a living," said Ifrah Law Senior Counsel Kim Conroy. "Octagon's provisions reached well beyond that, and the court recognized it. For Virginia employers, the lesson is practical: restrictive covenants need careful, specific drafting, or they may not hold up when tested."

The firm represents Sohaili, a former Octagon tennis agent who left to join another agency. Octagon alleged that Sohaili breached the restrictive covenants in his employment agreement when he changed agencies and several of his former clients subsequently terminated representation with Octagon and joined him at his new firm, Evolve. When considering the enforceability of a restrictive covenant such as a non-compete or non-solicitation provision, Virginia courts weigh the non-compete's function, geographic scope and duration together. An overly broad restriction on the employee's work cannot be saved by narrow limits on time or territory, according to the Supreme Court of Virginia. Ultimately, the court found Octagon's provisions too broad to meet this standard.

Judge Leonie M. Brinkema of the U.S. District Court for the Eastern District of Virginia granted the motion in part and denied it in part, leaving one remaining issue for trial.

Ifrah Law’s team includes Founding Member Jeff Ifrah, Senior Counsel Kim Conroy, Associate Abbey Block and Associate Katie Kovalsky. The ruling adds to the firm’s record defending clients in high-stakes commercial and employment litigation, from restrictive-covenant disputes to class actions and mass arbitrations.

Washington, D.C.-based Ifrah Law is a nationally recognized litigation law firm that has been at the center of precedent-setting cases. Operating at the cutting edge of technology, innovation and regulation, Ifrah Law represents clients through the entire business cycle — from the formation of a corporation or licensing relationship, through marketing, partner agreements, growth, and disputes, to profitable exits. The firm's lawyers also vigorously advocate for clients facing government investigations and high-stakes litigation.

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