The Virginia Business Litigation Blog
When drafting non-solicitation agreements, precision matters. Undefined terms and sweeping restrictions can render an entire covenant unenforceable. And in Virginia, courts won’t lift a finger to fix the problem. Employers drafting non-solicitation agreements need to define their key terms with specificity and include reasonable temporal and geographic limitations. If an employee can’t be reasonably expected to understand what the agreement restricts him from doing, he probably won’t be required to adhere to it. Restrictions against the solicitation of customers should be limited to customers the employee actually served, and non-recruitment clauses should be tied to competing services rather than all employment positions. Notably, Virginia courts (unlike those in some other states) construe ambiguities in the agreement against the employer and will not rewrite a poorly drafted covenant to save it. A recent Fairfax County Circuit Court opinion illustrates just how quickly a non-solicitation provision can unravel when its key terms are ambiguous and its reach extends beyond what is reasonably necessary to protect a legitimate business interest.
Let’s take a look at Intercoastal Mortgage LLC v. Wampler (Fairfax Cir. Ct. Mar. 30, 2026). Intercoastal Mortgage LLC (“ICM”) is a mortgage company that originates, underwrites, and funds mortgages across 19 states. The individual defendants—a husband, wife, and son who are military veterans and mortgage professionals, along with two support staff members—left their employment at ICM to join a competitor, Primis Mortgage. Some of their customers followed them. ICM sued, relying primarily on two non-solicitation provisions (Sections 3.3 and 4.2) in its Outside Loan Officer Employment Agreement, as well as an employee non-recruitment clause. Judge Manuel A. Capsalis granted the defendants’ plea in bar, holding that the non-solicitation provisions in the plaintiff’s employment agreement were overbroad and unenforceable as a matter of law.
The court analyzed each relevant provision under the familiar three-part test set out in Home Paramount Pest Control Cos. v. Shaffer, 282 Va. 412 (2011), which holds that a restrictive covenant is enforceable only if it (1) is narrowly drawn to protect the employer’s legitimate business interest, (2) is not unduly burdensome on the employee’s ability to earn a living, and (3) is not against public policy. The employer bears the burden of proving 
all three elements, and any ambiguities are construed against the employer.
Section 3.3 of the agreement required employees to covenant “not to attempt to move any pipeline loan to any other person or entity following the end of employment.” The court was troubled that the phrases “attempt to move” and “pipeline loan” were undefined in the agreement. What exactly did they mean? The employer’s own testimony revealed that even ICM didn’t have a consistent understanding of what they meant. At an evidentiary hearing, ICM’s CEO initially described an “attempt to move” as a form of indirect solicitation, such as asking a builder to call a customer on your behalf so you could avoid contacting them directly. But he later took a much broader position, claiming that even if a former employee merely responded to a customer who reached out on their own initiative, that would constitute an “attempt to move.” Under this interpretation, a departing loan officer who passively accepted an inbound call from a former customer would be in breach of the agreement. The court found this interpretation would require the employee to affirmatively refuse to do business with any customer who sought them out and refer that customer back to ICM, regardless of the customer’s preference.
The term “pipeline loan” fared no better. A defendant testified that the term refers to loans that are under contract, with an executed agreement between buyer and seller. ICM argued for a much broader definition encompassing not only active pipeline loans but also “prospects”—customers who had been preapproved but hadn’t yet gone under contract or might still be shopping for homes. The CEO conceded that in the case of a prospect, “there’s actually no loan at all,” but rather “the potential for there to be a loan.”
The court held that these ambiguities were fatal. Virginia law is clear that when a restrictive covenant is susceptible to two or more differing interpretations, at least one of which is functionally overbroad, the clause is unenforceable. Courts will not choose the narrower reading to rescue the provision. Section 3.3 was also deemed overbroad because it contained no temporal or geographic limitation.
The court found similar problems with Section 4.2(a), which prohibited former employees from soliciting any customer for whom ICM had processed and closed a loan in the prior 12 months. The restriction covered any company customer; it was not limited to customers the departing employee had personally served. The CEO himself acknowledged that it would be “unrealistic” for employees to know about other loan officers’ customers. Virginia courts have consistently disfavored provisions that impose this kind of unknowable compliance obligation on departing employees.
Section 4.2(b), the employee non-recruitment provision, was also struck down because it prohibited recruiting any ICM employee for any type of employment with any person or entity. As the court observed, this would bar a defendant from recruiting an ICM employee to open a restaurant or invest in a startup, activities that have nothing to do with ICM’s mortgage business. The CEO conceded that the provision was intended to prevent employees from taking groups of people to work in the same industry, but the language as written went far beyond that intent. Courts decide enforceability issues based on the contract as written, not on what the employer may have intended.
Public policy issues don’t usually play much of a role in these non-solicitation cases, but they did here. The court was of the view that preserving consumer choice is an important public policy requirement. The court emphasized that restricting customers’ freedom to choose their own mortgage professional does not serve the public interest. This principle appeared in the court’s analysis of all three provisions, but it was most prominent in the Section 3.3 discussion. The court noted the CEO’s concession that there was essentially no scenario in which a former ICM customer could seek out one of the individual defendants at Primis and close a loan without ICM treating it as a violation. If every instance of a customer voluntarily following a loan officer to a new employer constitutes a breach, the customer’s right to choose is effectively eliminated. The agreement was thus both overbroad and against public policy and could not be enforced.