The Virginia Business Litigation Blog
In Virginia, restrictive covenants—particularly non-compete and non-solicitation clauses—are enforceable only if narrowly tailored to protect a legitimate business interest without unduly burdening an individual’s ability to earn a livelihood. Courts apply a three-part test: the restraint must (1) be no broader than necessary to protect the employer’s interests, (2) not be unduly harsh or oppressive to the employee, and (3) be reasonable in light of sound public policy. (See Modern Env’ts v. Stinnett, 263 Va. 491, 493 (2002)). Importantly, any ambiguity in the language is construed against the drafter (the employer, typically). The Supreme Court of Virginia has long emphasized that restrictive covenants are disfavored and must be drafted with surgical precision if they are to withstand judicial scrutiny. Earlier this month, the Norfolk Circuit Court decided Knepper v. The Lawson Companies, Inc., in which it analyzed an employer’s restrictive covenants and found them unenforceable due to indefinite language and multiple instances of overbreadth.
Kristopher Knepper, a former executive at The Lawson Companies (TLC), was hired in 2016 to serve as Director of Development and Acquisitions, later rising to Vice President. As part of his employment onboarding, Knepper signed a standalone “Restrictive Covenants Agreement” that prohibited him from engaging in low-income housing development work within broad geographic boundaries for two years after his departure. Separately, in 2020, Knepper became a partial owner of TLC’s affiliated holding company, TLC Holding, LLC, when he was granted Class B membership units. That ownership interest triggered a second set of restrictive covenants, this time embedded in the company’s Operating Agreement. These restrictions were functionally similar to those in the earlier agreement but extended indefinitely, applying as long as Knepper remained a member of the LLC.
In 2023, TLC terminated Knepper’s employment without cause. He retained his Class B Units and thus 
remained an inactive member of the LLC (but not an employee). Shortly thereafter, Knepper initiated a lawsuit seeking, among other relief, a declaration that both restrictive covenants were unenforceable. The court methodically applied Virginia’s three-part test and found both agreements lacking in several key respects.
1. Geographic Ambiguity and Overreach
The court began its analysis by criticizing the geographic scope of the non-compete provision in the Restrictive Covenants Agreement, which prohibited Knepper from engaging in competitive activity across “Hampton Roads, Virginia, Richmond, Virginia, or Charleston, South Carolina or any other metropolitan area in which [TLC] is engaged in business….” This scope was problematic in two respects. First, TLC had presented no evidence of any actual business activity in Charleston, South Carolina. Including it in the noncompete therefore violated the principle that geographic restrictions must be grounded in a demonstrable business interest. Second, the term “Hampton Roads” was undefined and inherently ambiguous, encompassing multiple cities with unclear boundaries. Courts in Virginia have routinely invalidated non-competes that impose restrictions in undefined or speculative locales.
2. Indefinite Duration Tied to Ownership
While the Restrictive Covenants Agreement included a two-year post-employment limitation, the restrictive covenant in the Operating Agreement had no fixed endpoint. Because Knepper remained a passive owner of Class B Units, TLC argued that the OA’s restrictions should continue to apply indefinitely, or at least until he sold or relinquished his interest. The court rejected this premise outright, holding that the absence of any durational limit for inactive, non-employee members rendered the provision unenforceable. As the court noted, such a restriction could theoretically bind a former employee for life, a result incompatible with the requirement that restraints on trade be narrowly drawn and time-bound.
3. Functional Overbreadth
Both sets of covenants also failed in their description of restricted activity. The earlier agreement prohibited Knepper from working on any project he had “pursued” on behalf of TLC, even if the company itself later chose not to pursue it. The court deemed this language overly broad and unduly harsh, as it would bar Knepper from working on entirely abandoned projects that TLC had no ongoing interest in. Similarly, a clause prohibiting him from soliciting any TLC employee “in any capacity”—even for roles unrelated to the company’s business—was found to be excessive. The court gave the colorful example of hiring a former TLC employee as a personal dog walker to illustrate the absurd breadth of the provision.
Knepper serves as a cautionary tale for lawyers drafting restrictive covenants, particularly in dual-capacity relationships involving both employment and ownership. Drafters must avoid the temptation to overprotect by casting wide nets; instead, enforceable covenants must be narrowly tailored to match the employer’s specific business interests. Anything less invites judicial scrutiny and, as in Knepper, outright invalidation.