open-agreements 0.7.6 → 0.8.0

package/skills/legal-explainers/non-compete-contract-explainer/content/victoria.md

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+---
+jurisdiction: "Victoria, Australia"
+slug: victoria
+countryCode: AU
+snapshotAsOf: "2026-06-19"
+lastReviewed: "2026-06-10"
+canonicalUrl: https://openagreements.org/practice-guides/non-compete/au/victoria
+license: CC BY 4.0
+stale: false
+---
+
+> [!IMPORTANT]
+> **Informational only — not legal advice.** This is a snapshot of an OpenAgreements practice note,
+> provided for general information. It is not legal advice, does not create an attorney-client
+> relationship, and is not a substitute for a licensed attorney in the relevant jurisdiction.
+> Laws change; verify against the canonical version before relying on it.
+>
+> **Canonical:** https://openagreements.org/practice-guides/non-compete/au/victoria · **Snapshot as of:** 2026-06-19 · License: CC BY 4.0 · © openagreements.org
+
+# Non-Compete Enforceability in Victoria[^about]
+
+In Victoria a post-employment non-compete is presumptively void as a restraint of trade and binds a former employee only so far as it is reasonable; Victoria has no statutory read-down power, so courts apply the common-law blue-pencil rule only — they can delete severable words but cannot rewrite an overbroad clause, and as Just Group v Peck shows, even an elaborately drafted restraint can fail because severance is not a safety net.
+
+
+## At a glance
+
+| Question | Victoria, Australia |
+| --- | --- |
+| **Are non-competes enforceable?** | Allowed if reasonable |
+| **Bottom line** | A Victorian non-compete is presumptively void and binds a former employee only so far as it is reasonable to protect a legitimate interest; there is no statutory read-down power, so a court can only strike out grammatically severable words under the blue-pencil rule, and a carefully drafted multi-limb restraint that severance cannot save fails entirely. |
+| **Main law or case** | Common-law restraint of trade (no equivalent of the NSW Restraints of Trade Act 1976) |
+| **Main exceptions** | Sale-of-business covenants are judged more leniently; a proposed federal ban would, if enacted, cover most employees earning under the Fair Work Act high-income threshold (with sale-of-business and above-threshold restraints reported to be excluded), but it is not yet law. |
+| **Can a court narrow it?** | Only strikes wording |
+| **Applies to contractors?** | Yes |
+| **Restriction extended during a breach?** | Untested; Australian courts treat rolling or indefinite restraints with suspicion and generally prefer damages over extending an injunction. |
+| **Maximum length set by law** | No statutory cap; reasonableness is judged case by case and tested as at the date of the contract, and longer periods and wider areas attract closer scrutiny. |
+
+## Are employee non-competes enforceable in Victoria? {#enforceability}
+
+**Short answer.** Only so far as they are reasonable. A post-employment non-compete is treated as a restraint of trade, which the courts presume is void as contrary to public policy unless the employer shows it goes no further than is reasonably necessary to protect a legitimate business interest [^just-presumed-void]. The starting point is presumptive invalidity, and the burden sits with the employer to justify the clause [^lindner-prima-facie].
+
+Victoria is not a per se ban jurisdiction, and it has no statute that sets fixed numeric limits on duration or area. It is a reasonableness jurisdiction built entirely on the common-law restraint-of-trade doctrine. Every post-employment covenant is presumptively unenforceable, and the employer must prove that the restriction on the employee's freedom to work is reasonable [^lindner-onus].
+
+"A term in a contract, which is a restraint of trade ('a restraint clause'), is presumed to be void as contrary to public policy."[^just-presumed-void]
+
+Courts apply the doctrine more strictly to employment covenants than to covenants in commercial deals, because an employer is not entitled to be protected from ordinary competition by a former employee [^lindner-face-competition]. The foundational High Court authorities — *Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co* and *Buckley v Tutty* — establish the same framework that Victorian courts continue to apply. The sections that follow work through whether a court can narrow an overbroad clause, why cascading clauses do not guarantee enforcement, what counts as a legitimate interest, how reasonableness of scope is judged, what happens when the employer is the party in breach, and the open question of whether a breach can extend the restraint.
+
+## Can a Victorian court narrow an overbroad non-compete? {#court-narrowing}
+
+**Short answer.** Only by deleting severable words — not by reading the clause down or rewriting it. Victoria has no statute giving a court power to enforce an overbroad restraint to a reasonable extent. The only narrowing tool is the common-law blue-pencil rule: a court can strike out grammatically severable words, but it cannot read an unduly wide clause down to preserve its validity [^just-no-readdown]. Adding words to confine a restraint would remake the clause rather than enforce it, which a court will not do [^just-rewrite].
+
+The practical consequence is that severance is not a safety net. If the words that make a restraint unreasonable cannot simply be crossed out without changing the meaning of what remains, the whole restraint fails. A court will not reconstruct the bargain to save a clause the employer drafted too widely [^just-no-new-agreement].
+
+"However, it is not permissible for a court to read down an unduly wide clause in order to preserve its validity."[^just-no-readdown]
+
+*Just Group Ltd v Peck* is the cautionary example. The restraint was an elaborate, multi-limb clause, yet the Court of Appeal held that the first limb went further than the employer's legitimate interests required and was therefore invalid [^just-first-limb-invalid]. The Court refused to read that limb down, because doing so would impermissibly rewrite the restraint rather than give effect to its meaning [^just-rewrite], and it declined to sever the offending parts; the covenant and words were not severed and the appeal was dismissed [^just-dismiss]. The lesson is that careful, layered drafting does not substitute for drafting each restraint no wider than the interest actually requires.
+
+> [!CAUTION]
+> **Drafting note.**
+>
+> Because a Victorian court will not read an overbroad covenant down and may refuse to sever it, an unreasonable restraint is more likely to fall entirely than to be trimmed by the court. Draft scope, geographic area, and duration to the minimum the legitimate business interest actually requires, so the clause is defensible exactly as written rather than dependent on the court excising words [^just-no-new-agreement].
+
+## Are cascading or ladder restraint clauses valid in Victoria? {#cascading-clauses}
+
+**Short answer.** They are a common drafting device, but they are not a guarantee. A cascading clause sets out a menu of progressively narrower combinations of period and area, each expressed as a separate, severable restraint, so that if the widest is unreasonable a narrower one can still stand. Describing that device, the Court of Appeal in *Wallis Nominees (Computing) Pty Ltd v Pickett* explained the commonly used cascading form precisely in order to point out that the clause before it was NOT drafted that way — its supposed alternative was not a stand-alone option but referred back to the first option, so the clause was not severable [^wallis-cascading]. The device works only if each rung is genuinely independent and capable of being struck out without rewriting the rest, and only if each rung is itself reasonable. Where the words that make a restraint unreasonable cannot simply be crossed out without changing the meaning of what remains, severance fails and the restraint falls.
+
+Two parts have to be satisfied before a court will sever. The impugned part must be capable of being removed as if crossed out with a blue pen — a court can remove words from a restraint clause but not rewrite it — and the part removed must be an independent covenant whose excision does not change the meaning of what is left [^wallis-remove-not-rewrite]. A clause that reads as a single covenant, even if drafted with apparent alternatives, will not satisfy that test.
+
+"a court can remove words from a restraint clause but not rewrite it."[^wallis-remove-not-rewrite]
+
+*Just Group Ltd v Peck* shows that even a multi-limb restraint can fail this analysis: the Court of Appeal declined to sever the offending parts and dismissed the appeal, because severing the clause down to what the employer wanted would have amounted to making a new agreement for the parties [^just-no-new-agreement-cascade].
+
+> [!CAUTION]
+> **Drafting note.**
+>
+> A cascading clause is not a safety net. Each rung should be drafted as a genuinely independent covenant that is reasonable on its own, not as a mechanical ladder of every possible permutation, because a court can only delete severable words and will not rewrite or read the clause down to rescue an overbroad rung [^just-no-readdown-cascade].
+
+## What legitimate interest must an employer show to enforce a Victorian non-compete? {#legitimate-interest}
+
+**Short answer.** A protectable business interest — not a mere wish to avoid competition. An employer cannot restrain a former employee simply because the new employer is a rival; it must be prepared to face that competition if it comes [^lindner-face-competition-interest]. The interests the law recognises are the employer's trade connection with its customers and the goodwill of the business — together with genuine trade secrets and confidential information. In *Wallis Nominees (Computing) Pty Ltd v Pickett* the Court of Appeal found that the employer did have a legitimate interest in its goodwill in its customers — its customer connections, which may include knowledge of and influence over its customers [^wallis-customer-connection] — even though it went on to hold the particular clause unreasonable. An employee's own general skill, experience, and know-how are the employee's to use.
+
+Identifying the interest is not enough on its own; the restraint must do no more than is reasonably necessary to protect it [^wallis-test]. In *Wallis Nominees (Computing) Pty Ltd v Pickett* the Court of Appeal accepted that the employer did have a legitimate interest in protecting its customer connections, but still held the restraint void because it went further than that interest required and was unreasonable in both extent and duration [^wallis-conclude-unreasonable]. The practical point for drafters is that the protectable interest has to be real and the restraint has to be tied to it; a clause aimed at competition by itself, rather than at a recognised interest, is invalid.
+
+"we conclude that while DWS did have a legitimate interest in restraining Mr Pickett, the clause was unreasonable having regard to both its extent and to its duration."[^wallis-conclude-unreasonable]
+
+> [!CAUTION]
+> **Drafting note.**
+>
+> A clause that simply bars a former employee from joining or starting a competing business, without tying the restraint to a specific protectable interest, is the weakest position. Identify the actual interest — the customer connection, the goodwill, or the genuine trade secrets — and draft the restraint no wider than is reasonably necessary to protect it, because a restraint that does more than that interest requires is unreasonable and void [^wallis-test].
+
+## How long and how wide can a Victorian non-compete be? {#reasonableness-factors}
+
+**Short answer.** There is no statutory limit; reasonableness is decided case by case on the activity restrained, the geographic area, the duration, and the employee's seniority and actual customer influence. The Court of Appeal has held that whether a legitimate interest exists is assessed as at the date the contract was entered into, not by hindsight [^wallis-assessed-at-time], and as a general matter the restraint's reasonableness is likewise tested by reference to that date rather than to how things later turned out. A geographic area wider than the employer's business reasonably requires, or a period longer than is needed to protect the interest, is likely to be unreasonable [^lindner-area-wide].
+
+Because the limits are judge-made, there is no fixed ceiling to anchor a covenant, and the analysis cuts in both directions. In *Lindner v Murdock's Garage* the High Court held an area covenant void because the area it covered was wider than the employer's business reasonably required [^lindner-area-wide]. In *Wallis Nominees (Computing) Pty Ltd v Pickett* the Court of Appeal held the restraint unreasonable in both extent and duration even though the employer did have a legitimate interest, which shows that an over-long or over-wide clause fails on its own terms regardless of the interest behind it [^wallis-conclude-unreasonable-scope].
+
+"The assessment of whether a legitimate interest exists is to be assessed at the time the contract is being entered into."[^wallis-assessed-at-time]
+
+On duration, the question is what period is reasonably necessary to protect the interest — for a customer-connection interest, commonly how long it takes for the former employee's influence over clients to fade or for the employer to cement its own connection. As a general matter, longer periods and wider areas attract closer scrutiny, and the employer carries the onus of justifying whatever it has chosen [^lindner-onus-scope].
+
+## Do paid restraints, garden leave, and fresh consideration help in Victoria? {#garden-leave}
+
+**Short answer.** They can strengthen an employer's position, but as a general matter they do not displace the reasonableness requirement. As a general principle of restraint-of-trade law, a restraint the employee is paid to observe can weigh against the argument that the clause stops the employee earning a living, and garden leave — where the employee stays employed and paid through the notice period while bound by duties of fidelity — is generally assessed more flexibly than a post-termination restraint. These are general principles rather than rules drawn from any on-point Victorian decision in the cases discussed here, and none of these features converts an overbroad covenant into a reasonable one: the restraint must still do no more than is reasonably necessary to protect a legitimate interest [^wallis-test-garden].
+
+For mid-employment restraints — covenants introduced after the employee is already on foot — the practical concerns, as a general matter, are fresh consideration and reasonableness assessed at the time the new clause is agreed. Victorian courts test whether a legitimate interest exists as at the date the contract is entered into [^wallis-assessed-at-time-garden], and the restraint's reasonableness is generally tested by reference to that same date, so a restraint bolted on later is generally judged on the circumstances then, not on the original hiring. A generously remunerated, fixed-term garden-leave arrangement for a senior person can be enforceable as a general matter, but it remains subject to the same underlying reasonableness scrutiny rather than being automatically valid.
+
+## What if the employer repudiated the contract or wrongfully dismissed the employee? {#employer-breach}
+
+**Short answer.** The restraint may fall away. Where the employer's own wrongful conduct ends the employment, a court will generally not enforce a post-employment restraint against the employee. The Court of Appeal has stated that, over more than a century, courts have held a restraint clause unenforceable against an employee whose employment ends through the employer's wrongful conduct — including wrongful dismissal or the employee's acceptance of the employer's repudiatory conduct [^crowe-holding].
+
+This is grounded in equity as well as contract. A party seeking an injunction to enforce a restraint must itself have performed its side of the bargain; he who comes to equity must do equity [^crowe-equity]. An employer that has repudiated the contract and had that repudiation accepted by the employee is in no position to insist on the restraint. The Court of Appeal noted that no reported case in a superior court in Australia or England has enforced a restraint against a former employee in those circumstances [^crowe-no-reported].
+
+"A series of decisions in the High Court, and in courts of high authority in England and Canada, have stated, over the course of more than a century, that a restraint clause is not enforceable against an employee whose employment ends by the employer's wrongful conduct — whether it be wrongful dismissal or the employee's acceptance of the employer's repudiatory conduct."[^crowe-holding]
+
+> [!NOTE]
+> **Practice note.**
+>
+> The employer already bears the onus of proving the restraint reasonable before any question of its own breach arises [^lindner-onus-breach]. On top of that, an employer that terminates abruptly — without giving contractual notice or paying in lieu — or that otherwise repudiates the contract risks losing the very restraint it wants to rely on, because a restraint clause is not enforceable against an employee whose employment ends through the employer's wrongful conduct [^crowe-holding]. Before suing to enforce a covenant, confirm that the termination itself complied with the contract.
+
+## Does a Victorian non-compete pause or extend if the employee breaches? {#tolling}
+
+**Short answer.** This is an open question, and an employer should not assume the clock stops. No settled Victorian authority holds that a restraint period tolls — pauses and then resumes — while a former employee is in breach or while litigation runs. Because the existence of a legitimate interest is assessed as at the date the contract was entered into [^wallis-assessed-at-time-tolling], and reasonableness is generally tested by reference to that date, a clause that automatically lengthens the restraint depending on the employee's later conduct may sit uneasily with the way Victorian courts test validity.
+
+A drafting device that extends the period by the length of any breach pushes the effective duration beyond what was assessed as reasonable at the outset, and there is no clear Victorian authority validating it. The safer assumption is that the stated period is the maximum the employer can rely on, and that a breach is generally better addressed through an injunction or a damages claim rather than by stretching the restraint — Australian courts generally prefer a damages or injunction remedy over a restraint that extends itself. The restraint-of-trade doctrine confines a covenant to what is reasonably necessary [^just-no-readdown-tolling], which on one view sits awkwardly with open-ended or self-extending restraints, though that is commentary rather than a holding on tolling.
+
+> [!CAUTION]
+> **Drafting note.**
+>
+> Do not rely on a clause that purports to extend the non-compete by the length of any breach. No clear Victorian authority validates tolling of the restraint period, and because the existence of the interest is tested as at the date of the contract — with reasonableness generally tested by reference to that date — an automatic extension may risk being treated as unreasonable [^wallis-assessed-at-time-tolling]. Treat the stated duration as the maximum, and address an actual breach through an injunction or a damages claim instead.
+
+## Do Victorian restraint rules differ for contractors and business sales? {#contractors-and-sale}
+
+**Short answer.** In some respects, yes. Restraints on independent contractors are assessed under the same restraint-of-trade reasonableness doctrine as employee covenants; what matters is the substance of the interest at stake rather than the label put on the relationship. Restraints given by the seller of a business are judged more leniently than employee restraints, because a buyer is entitled to protect the goodwill it paid for and the parties bargain on more equal terms [^lindner-sale-distinction].
+
+The sale-of-business leniency is long-standing and uncontroversial doctrine: a restraint in a sale agreement is more easily upheld than the same restraint in an employment contract [^lindner-more-easily], because the policy concerns that make employment covenants suspect — unequal bargaining power and the risk of locking a person out of their livelihood — are weaker when a vendor sells a business for value and promises not to immediately compete the goodwill away. A multi-year restraint can be reasonable in that setting.
+
+For contractors, the key question is the same one that governs employees: is there a legitimate interest, and is the scope no wider than reasonably necessary to protect it [^wallis-test-contractors]. The label matters less than the substance of the relationship and the interest at stake.
+
+## Is a federal ban on non-competes coming to Australia? {#federal-reform}
+
+**Short answer.** A ban has been proposed but is not yet law, and as of June 2026 the common-law restraint-of-trade framework above still governs in Victoria [^just-presumed-void-reform]. According to Australian Government Treasury material and law-firm commentary, the Government has announced that it intends to ban post-employment non-competes for workers earning under the Fair Work Act high-income threshold (reported at around AUD $183,100), with consultation on the design under way, the reform expected to be legislated during 2026 and to take effect from 2027, and operating prospectively. Those figures and dates come from that secondary material — Treasury announcements and commentary — not from any enacted statute. Until any ban is enacted, the existing common-law framework continues to govern [^just-presumed-void-reform].
+
+The proposal, as described in current Treasury material and law-firm commentary rather than in any enacted statute, would cover most employees earning below the high-income threshold while excluding sale-of-business covenants and restraints on higher earners. Related arrangements such as non-solicitation, no-poach, and wage-fixing clauses are also reported to be under consideration. None of this is in force, and the precise scope, threshold, and commencement could change before any legislation passes; the threshold figure and the timeline in particular are drawn from secondary reporting and should be re-checked against the enacted text when it appears.
+
+Because this is a future legislative matter, employers should treat the timeline and detail as provisional rather than settled. A covenant entered into now is governed by existing law; whether and how a future ban would affect existing or new agreements will depend on the enacted text and its transitional provisions.
+
+> [!NOTE]
+> **Practice note.**
+>
+> Do not draft to a federal ban that does not yet exist. As of June 2026 no Commonwealth statute bans employee non-competes, so enforceability in Victoria still turns on the common-law reasonableness test [^just-presumed-void-reform]. Track the proposal through to enacted legislation before changing practice, because its threshold, scope, and commencement remain proposals subject to change.
+
+[^about]: By Steven Obiajulu, J.D. Published by [openagreements.org](https://openagreements.org). Last reviewed 2026-06-10. License: CC BY 4.0. Steven Obiajulu, J.D. is not admitted to practise law in Victoria, Australia. This article summarizes publicly available Victoria, Australia legal sources for general information only — it is not legal advice and does not create a lawyer–client relationship. It may not reflect the most recent legal developments and is provided without warranty as to accuracy or completeness; verify against the primary sources cited and consult a locally qualified lawyer before relying on it.
+
+[^just-presumed-void]: **Just Group Ltd v Peck** — "A term in a contract, which is a restraint of trade ('a restraint clause'), is presumed to be void as contrary to public policy." *Just Group Ltd v Peck [2016] VSCA 334 (the Court).* <https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VSCA/2016/334.html>
+
+[^lindner-prima-facie]: **Lindner v Murdock's Garage** — "Any contractual restraint of trade is prima facie unlawful and invalid." *Lindner v Murdock's Garage [1950] HCA 48; (1950) 83 CLR 628 (per Kitto J).* <https://www.hcourt.gov.au/sites/default/files/eresources/1950/HCA/48.pdf>
+
+[^lindner-onus]: **Lindner v Murdock's Garage** — "The onus was on the plaintiff firm to prove circumstances showing that the restriction on the defendant's freedom to work was reasonable." *Lindner v Murdock's Garage [1950] HCA 48; (1950) 83 CLR 628 (per McTiernan J).* <https://www.hcourt.gov.au/sites/default/files/eresources/1950/HCA/48.pdf>
+
+[^lindner-face-competition]: **Lindner v Murdock's Garage** — "An employer must be prepared to face the competition of a former employee if it comes." *Lindner v Murdock's Garage [1950] HCA 48; (1950) 83 CLR 628 (per McTiernan J).* <https://www.hcourt.gov.au/sites/default/files/eresources/1950/HCA/48.pdf>
+
+[^just-no-readdown]: **Just Group Ltd v Peck** — "However, it is not permissible for a court to read down an unduly wide clause in order to preserve its validity." *Just Group Ltd v Peck [2016] VSCA 334 (the Court).* <https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VSCA/2016/334.html>
+
+[^just-rewrite]: **Just Group Ltd v Peck** — "to read down the first limb, in the manner suggested, would be to, impermissibly, rewrite the restraint clause in order to preserve its validity" *Just Group Ltd v Peck [2016] VSCA 334 (the Court).* <https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VSCA/2016/334.html>
+
+[^just-no-new-agreement]: **Just Group Ltd v Peck** — "It is not for the Court to make a new agreement for the parties." *Just Group Ltd v Peck [2016] VSCA 334 (the Court).* <https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VSCA/2016/334.html>
+
+[^just-first-limb-invalid]: **Just Group Ltd v Peck** — "The first limb of the restraint clause exceeds what is necessary for the protection of the legitimate interests of Just Group and is therefore invalid." *Just Group Ltd v Peck [2016] VSCA 334 (the Court).* <https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VSCA/2016/334.html>
+
+[^just-dismiss]: **Just Group Ltd v Peck** — "We will grant leave to appeal and dismiss the appeal." *Just Group Ltd v Peck [2016] VSCA 334 (the Court).* <https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VSCA/2016/334.html>
+
+[^wallis-cascading]: **Wallis Nominees (Computing) Pty Ltd v Pickett** — "the commonly used form of a cascading clause where it starts with the broadest possible restraint then provides increasingly narrow alternatives, each one standing alone." *Wallis Nominees (Computing) Pty Ltd v Pickett [2013] VSCA 24 (Warren CJ and Davies AJA).* <https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VSCA/2013/24.html>
+
+[^wallis-remove-not-rewrite]: **Wallis Nominees (Computing) Pty Ltd v Pickett** — "a court can remove words from a restraint clause but not rewrite it." *Wallis Nominees (Computing) Pty Ltd v Pickett [2013] VSCA 24 (Warren CJ and Davies AJA).* <https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VSCA/2013/24.html>
+
+[^just-no-new-agreement-cascade]: **Just Group Ltd v Peck** — "It is not for the Court to make a new agreement for the parties." *Just Group Ltd v Peck [2016] VSCA 334 (the Court).* <https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VSCA/2016/334.html>
+
+[^just-no-readdown-cascade]: **Just Group Ltd v Peck** — "However, it is not permissible for a court to read down an unduly wide clause in order to preserve its validity." *Just Group Ltd v Peck [2016] VSCA 334 (the Court).* <https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VSCA/2016/334.html>
+
+[^lindner-face-competition-interest]: **Lindner v Murdock's Garage** — "An employer must be prepared to face the competition of a former employee if it comes." *Lindner v Murdock's Garage [1950] HCA 48; (1950) 83 CLR 628 (per McTiernan J).* <https://www.hcourt.gov.au/sites/default/files/eresources/1950/HCA/48.pdf>
+
+[^wallis-customer-connection]: **Wallis Nominees (Computing) Pty Ltd v Pickett** — "The legitimate interest alleged by DWS is its goodwill in its customers, the essence of which is its customer connections which may include knowledge of, and influence over, its customers." *Wallis Nominees (Computing) Pty Ltd v Pickett [2013] VSCA 24 (Warren CJ and Davies AJA).* <https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VSCA/2013/24.html>
+
+[^wallis-test]: **Wallis Nominees (Computing) Pty Ltd v Pickett** — "The test is whether the restraint does more than what is reasonably necessary to protect the employer's legitimate interest." *Wallis Nominees (Computing) Pty Ltd v Pickett [2013] VSCA 24 (Warren CJ and Davies AJA).* <https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VSCA/2013/24.html>
+
+[^wallis-conclude-unreasonable]: **Wallis Nominees (Computing) Pty Ltd v Pickett** — "we conclude that while DWS did have a legitimate interest in restraining Mr Pickett, the clause was unreasonable having regard to both its extent and to its duration." *Wallis Nominees (Computing) Pty Ltd v Pickett [2013] VSCA 24 (Warren CJ and Davies AJA).* <https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VSCA/2013/24.html>
+
+[^wallis-assessed-at-time]: **Wallis Nominees (Computing) Pty Ltd v Pickett** — "The assessment of whether a legitimate interest exists is to be assessed at the time the contract is being entered into." *Wallis Nominees (Computing) Pty Ltd v Pickett [2013] VSCA 24 (Warren CJ and Davies AJA).* <https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VSCA/2013/24.html>
+
+[^lindner-area-wide]: **Lindner v Murdock's Garage** — "I think it must be held that the area was unreasonably wide." *Lindner v Murdock's Garage [1950] HCA 48; (1950) 83 CLR 628 (per McTiernan J).* <https://www.hcourt.gov.au/sites/default/files/eresources/1950/HCA/48.pdf>
+
+[^wallis-conclude-unreasonable-scope]: **Wallis Nominees (Computing) Pty Ltd v Pickett** — "we conclude that while DWS did have a legitimate interest in restraining Mr Pickett, the clause was unreasonable having regard to both its extent and to its duration." *Wallis Nominees (Computing) Pty Ltd v Pickett [2013] VSCA 24 (Warren CJ and Davies AJA).* <https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VSCA/2013/24.html>
+
+[^lindner-onus-scope]: **Lindner v Murdock's Garage** — "The onus was on the plaintiff firm to prove circumstances showing that the restriction on the defendant's freedom to work was reasonable." *Lindner v Murdock's Garage [1950] HCA 48; (1950) 83 CLR 628 (per McTiernan J).* <https://www.hcourt.gov.au/sites/default/files/eresources/1950/HCA/48.pdf>
+
+[^wallis-test-garden]: **Wallis Nominees (Computing) Pty Ltd v Pickett** — "The test is whether the restraint does more than what is reasonably necessary to protect the employer's legitimate interest." *Wallis Nominees (Computing) Pty Ltd v Pickett [2013] VSCA 24 (Warren CJ and Davies AJA).* <https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VSCA/2013/24.html>
+
+[^wallis-assessed-at-time-garden]: **Wallis Nominees (Computing) Pty Ltd v Pickett** — "The assessment of whether a legitimate interest exists is to be assessed at the time the contract is being entered into." *Wallis Nominees (Computing) Pty Ltd v Pickett [2013] VSCA 24 (Warren CJ and Davies AJA).* <https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VSCA/2013/24.html>
+
+[^crowe-holding]: **Crowe Horwath (Aust) Pty Ltd v Loone** — "A series of decisions in the High Court, and in courts of high authority in England and Canada, have stated, over the course of more than a century, that a restraint clause is not enforceable against an employee whose employment ends by the employer's wrongful conduct — whether it be wrongful dismissal or the employee's acceptance of the employer's repudiatory conduct." *Crowe Horwath (Aust) Pty Ltd v Loone [2017] VSCA 181 (Ashley, Priest and Beach JJA).* <https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VSCA/2017/181.html>
+
+[^crowe-equity]: **Crowe Horwath (Aust) Pty Ltd v Loone** — "He who comes to equity must do equity" *Crowe Horwath (Aust) Pty Ltd v Loone [2017] VSCA 181 (Ashley, Priest and Beach JJA), quoting Gibbs J in Geraghty v Minter (1979) 142 CLR 177.* <https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VSCA/2017/181.html>
+
+[^crowe-no-reported]: **Crowe Horwath (Aust) Pty Ltd v Loone** — "there is no reported case in a court of superior jurisdiction in Australia or England which has decided that a restraint clause is enforceable against a former employee in such circumstances." *Crowe Horwath (Aust) Pty Ltd v Loone [2017] VSCA 181 (Ashley, Priest and Beach JJA).* <https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VSCA/2017/181.html>
+
+[^lindner-onus-breach]: **Lindner v Murdock's Garage** — "The onus was on the plaintiff firm to prove circumstances showing that the restriction on the defendant's freedom to work was reasonable." *Lindner v Murdock's Garage [1950] HCA 48; (1950) 83 CLR 628 (per McTiernan J).* <https://www.hcourt.gov.au/sites/default/files/eresources/1950/HCA/48.pdf>
+
+[^wallis-assessed-at-time-tolling]: **Wallis Nominees (Computing) Pty Ltd v Pickett** — "The assessment of whether a legitimate interest exists is to be assessed at the time the contract is being entered into." *Wallis Nominees (Computing) Pty Ltd v Pickett [2013] VSCA 24 (Warren CJ and Davies AJA).* <https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VSCA/2013/24.html>
+
+[^just-no-readdown-tolling]: **Just Group Ltd v Peck** — "However, it is not permissible for a court to read down an unduly wide clause in order to preserve its validity." *Just Group Ltd v Peck [2016] VSCA 334 (the Court).* <https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VSCA/2016/334.html>
+
+[^lindner-sale-distinction]: **Lindner v Murdock's Garage** — "A distinction is drawn between a restraint upon trade included in an agreement for the sale of a business and a restraint included in an agreement with an employee." *Lindner v Murdock's Garage [1950] HCA 48; (1950) 83 CLR 628 (per Latham CJ, dissenting).* <https://www.hcourt.gov.au/sites/default/files/eresources/1950/HCA/48.pdf>
+
+[^lindner-more-easily]: **Lindner v Murdock's Garage** — "The restraint is more easily upheld in the former than in the latter case." *Lindner v Murdock's Garage [1950] HCA 48; (1950) 83 CLR 628 (per Latham CJ, dissenting).* <https://www.hcourt.gov.au/sites/default/files/eresources/1950/HCA/48.pdf>
+
+[^wallis-test-contractors]: **Wallis Nominees (Computing) Pty Ltd v Pickett** — "The test is whether the restraint does more than what is reasonably necessary to protect the employer's legitimate interest." *Wallis Nominees (Computing) Pty Ltd v Pickett [2013] VSCA 24 (Warren CJ and Davies AJA).* <https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VSCA/2013/24.html>
+
+[^just-presumed-void-reform]: **Just Group Ltd v Peck** — "A term in a contract, which is a restraint of trade ('a restraint clause'), is presumed to be void as contrary to public policy." *Just Group Ltd v Peck [2016] VSCA 334 (the Court).* <https://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VSCA/2016/334.html>

package/skills/legal-explainers/non-compete-contract-explainer/content/virgin-islands.md

@@ -0,0 +1,193 @@
+---
+jurisdiction: "U.S. Virgin Islands"
+slug: virgin-islands
+countryCode: US
+snapshotAsOf: "2026-06-19"
+lastReviewed: "2026-06-03"
+canonicalUrl: https://openagreements.org/practice-guides/non-compete/us/virgin-islands
+license: CC BY 4.0
+stale: false
+---
+
+> [!IMPORTANT]
+> **Informational only — not legal advice.** This is a snapshot of an OpenAgreements practice note,
+> provided for general information. It is not legal advice, does not create an attorney-client
+> relationship, and is not a substitute for a licensed attorney in the relevant jurisdiction.
+> Laws change; verify against the canonical version before relying on it.
+>
+> **Canonical:** https://openagreements.org/practice-guides/non-compete/us/virgin-islands · **Snapshot as of:** 2026-06-19 · License: CC BY 4.0 · © openagreements.org
+
+# Non-Competes in the U.S. Virgin Islands[^about]
+
+The U.S. Virgin Islands may enforce a reasonable non-compete but has no statute on point; the Superior Court in Arvidson v. Buchar judges covenants under an indigenous common-law reasonableness test selected through the Banks methodology, and a small-island economy plus a no-at-will Wrongful Discharge Act make aggressive restraints hard to enforce.
+
+
+## At a glance
+
+| Question | U.S. Virgin Islands |
+| --- | --- |
+| **Are non-competes enforceable?** | Allowed if reasonable |
+| **Bottom line** | The U.S. Virgin Islands enforces a non-compete only if it is reasonable in duration, area, and scope under a single trial-court decision, and aggressive restraints are hard to enforce in a small-island, non-at-will economy. |
+| **Main law or case** | Arvidson v. Buchar, 2019 VI SUPER 122 (Super. Ct. V.I. 2019) (common law via 1 V.I.C. § 4) |
+| **Can a court narrow it?** | Yes — rewrites to reasonable |
+| **Applies to contractors?** | Unclear |
+| **Restriction extended during a breach?** | Silent — no statute or case addresses tolling |
+| **Maximum length set by law** | No statutory limit |
+
+## Are employee non-compete agreements enforceable in the U.S. Virgin Islands? {#employee-noncompetes}
+
+**Short answer.** Sometimes. The Virgin Islands is a *reasonableness* jurisdiction, not a per se ban like California or North Dakota. A covenant can be enforced if it is ancillary to a valid relationship, supported by consideration, and no broader than necessary to protect a legitimate business interest. But there is no non-compete statute, the leading authority is a single trial-court decision with no V.I. Supreme Court ruling behind it, and that decision struck the covenant in front of it down — so enforcement is real but fact-dependent and far from automatic [^arvidson-enforceable].
+
+The Virgin Islands is an unincorporated U.S. territory. An employment-covenant dispute is decided in the first instance by the Superior Court of the Virgin Islands applying territorial law, with appeals to the Supreme Court of the Virgin Islands (established 2007) and a parallel federal track in the District Court of the Virgin Islands under the Third Circuit. There is no code section that governs employee non-competes; enforceability is a matter of territorial common law, which the courts build through the methodology described below.
+
+Because the law lives in case decisions rather than a statute, most of the operating rules here are anchored to one opinion — *Arvidson v. Buchar* — and to the reception statute that tells Virgin Islands courts where to find their common law [^vic-1-4]. A covenant that would survive comfortably in a blue-pencil state still carries genuine first-impression risk in the territory.
+
+## What test does the Superior Court apply to a Virgin Islands non-compete? {#governing-test}
+
+**Short answer.** The Superior Court applies a common-law rule of reasonableness. Under *Arvidson*, a partial restraint of trade is valid only when it is ancillary to a valid contract or transaction, supported by valid consideration, protects a legitimate business interest, and is reasonable in its duration, geographic area, and the scope of activity it restricts [^arvidson-rule]. Reasonableness is then measured against five factors the court drew from earlier Virgin Islands case law [^arvidson-factors].
+
+The court frames the inquiry as a balance among the employer's legitimate business interest, the hardship the restraint imposes on the employee, and the public interest — assessed through the covenant's *time, place, and manner*. The five factors restate that balance as concrete questions:
+
+"This test of reasonableness must be applied to the following five factors 1 Is the duration of the restriction reasonable? 2 Is the area of restriction reasonable? 3 Is the interest of the employer reasonably protected? 4 Is undue hardship imposed on the employee? 5 Is the public interest reasonably protected?"[^arvidson-factors]
+
+The ultimate determination of reasonableness is a question of law, but it is a fact-intensive one: the court weighs the totality of the circumstances rather than applying a fixed formula [^arvidson-factintensive]. For in-house counsel that means a covenant is judged on its specific facts, and a clause that omits any durational, territorial, or activity limit will not survive.
+
+## If there is no statute, where does the non-compete rule come from? {#common-law-source}
+
+**Short answer.** From the territory's common law, which the courts now build deliberately rather than by copying the Restatements. Historically, 1 V.I.C. § 4 directed Virgin Islands courts to apply the Restatements as their rules of decision [^banks-section4]. In *Banks v. International Rental & Leasing Corp.*, the Supreme Court of the Virgin Islands held that the Legislature did not intend that statute to force mechanical application of the latest Restatement [^banks-method], and in *Connor* it set out the three-factor analysis Virgin Islands courts use to choose a rule [^connor-factors].
+
+This matters for non-competes because *Arvidson* did not simply lift Restatement (Second) of Contracts § 188 off the shelf. It ran the *Banks* analysis and chose an indigenous reasonableness rule, which is why the Virgin Islands standard is a common-law balance rather than a verbatim Restatement test.
+
+"We conclude that the Legislature did not intend for section 4 of title 1 to compel this Court to mechanically apply the most recent Restatement."[^banks-method]
+
+Under *Connor*, when the law is unsettled the court does not default to the majority rule automatically; it asks which approach is soundest for the territory:
+
+"Rather, this Court has instructed that, instead of mechanistically following the Restatements, courts should consider ‘three non-dispositive factors’ to determine Virgin Islands common law: ‘(1) whether any Virgin Islands courts have previously adopted a particular rule; (2) the position taken by a majority of courts from other jurisdictions; and (3) most importantly, which approach represents the soundest rule for the Virgin Islands.’"[^connor-factors]
+
+The practical takeaway: a covenant should be defended on Virgin Islands terms. Citing only mainland precedent or the Restatement as if it controlled invites a *Banks* challenge that the rule was never properly adopted here.
+
+## How do courts judge a covenant's duration, geographic area, and scope? {#duration-geography-scope}
+
+**Short answer.** By asking whether each dimension is no broader than necessary to protect a legitimate interest. *Arvidson* struck its covenant precisely because it gave no durational, territorial, or activity limit and never identified the interest it was meant to protect [^arvidson-scope]. The older decision in *V.I. Diving Schools v. Dixon* voided a covenant on the same ground — that it was an unreasonable restraint greater than necessary to protect the employer's business interest [^dixon-void].
+
+Geography deserves special attention. The territory is three small islands — St. Thomas, St. Croix, and St. John — so a territory-wide or *worldwide* restraint is hard to justify as the narrowest protection of a genuine interest. The same logic that makes a 50-mile radius unremarkable on the mainland can make an all-islands restraint look like a naked barrier to earning a living.
+
+"restrictive clauses of the agreement are void and unenforceable as against public policy on the ground that they are unreasonable restraint on competition."[^dixon-void]
+
+A covenant should therefore state an explicit duration, a defined geographic area tied to where the employer actually competes, and a scope limited to the activities that threaten the protected interest. *Dixon* is a 1983 Territorial Court decision predating *Banks*, so treat it as persuasive illustration rather than binding doctrine — but its reasoning tracks the modern *Arvidson* test.
+
+## What consideration supports a Virgin Islands non-compete, and is continued employment enough? {#consideration}
+
+**Short answer.** *Arvidson* makes valid consideration an element of an enforceable covenant, but no Virgin Islands decision squarely holds whether continued employment alone is sufficient for a covenant signed mid-employment [^arvidson-consideration]. The wrinkle is that the territory is not an at-will jurisdiction: the Wrongful Discharge Act lets an employer dismiss an employee for only nine enumerated reasons [^arvidson-wda], so the mainland argument that an employer gives value by merely refraining from firing is weaker here.
+
+> [!NOTE]
+> **Practice note.**
+>
+> Because the Wrongful Discharge Act limits when an employer may fire, a court could view a bare promise of continued employment as adding little new value. The conservative practice is to support a mid-employment covenant with fresh, independent consideration — a bonus, a raise, a promotion, or specialized training — rather than rely on continued employment alone [^q5-arvidson-wda].
+
+No on-point Virgin Islands case resolves the question, so this is a planning judgment rather than a settled rule. Obtaining the covenant at hire — when the offer of employment is itself the consideration — avoids the mid-employment problem, though even a covenant signed at hire must still satisfy *Arvidson*'s ancillary, protectable-interest, and reasonable-scope requirements.
+
+## Will a court narrow an overbroad covenant, or void it entirely? {#overbroad-narrowing}
+
+**Short answer.** *Arvidson* chose *equitable reformation* as the soundest rule for Virgin Islands non-competes, rejecting both the rigid blue-pencil rule and the all-or-nothing approach [^q6-arvidson]. But the court adopted reformation with an express *greater willingness to refuse to reform* agreements that are not reasonable on their face [^q6-arvidson-strict], and it declined to rewrite the covenant in front of it because that clause had no time, place, or scope limit to salvage. An employer therefore cannot assume a court will rescue an overbroad clause.
+
+> [!CAUTION]
+> **Drafting note.**
+>
+> Draft to the narrowest defensible scope from the start. Reformation is theoretically available in the Virgin Islands, but *Arvidson* applies it strictly — a court is reluctant to rewrite an agreement that is not reasonable on its face or that would require supplying essential terms [^q6-arvidson-strict]. A clause with no reasonable core to enforce risks losing entirely, as both *Arvidson* and the older *Dixon* decision show [^q6-dixon].
+
+A savings or step-down clause may improve the odds of partial enforcement, but only if enough reasonable terms already exist for a court to enforce without effectively writing a new covenant. The safer assumption is that the covenant as drafted is the covenant the court will judge.
+
+## Does the restricted period toll or extend if the employee breaches? {#tolling}
+
+**Short answer.** No Virgin Islands statute or decision addresses tolling — whether the clock pauses, or the restricted period is extended, while a former employee is violating the covenant or litigation is pending. This is an open question in the territory [^q7-arvidson].
+
+> [!NOTE]
+> **Practice note.**
+>
+> Treat any tolling or extension-on-breach clause as untested in the Virgin Islands. Because the controlling test asks whether the *total* restraint is reasonable in duration [^q7-arvidson], an extension that lengthens the covenant well beyond its stated term could itself be challenged as unreasonable. If you include a tolling clause, cap the maximum extension and keep the underlying period conservative so the worst-case total still looks reasonable.
+
+Because there is no on-point authority, a Virgin Islands court asked to enforce a tolling provision would likely reason from the same reasonableness principles that govern duration generally, and from persuasive mainland authority — but the outcome cannot be predicted with confidence.
+
+## If a non-compete is shaky, what protects trade secrets and confidential information? {#trade-secrets}
+
+**Short answer.** The Virgin Islands has adopted the Uniform Trade Secrets Act, which gives an employer a statutory remedy for misappropriation independent of any covenant [^vic-11-1001]. It defines a trade secret broadly [^vic-11-1002], preserves contractual remedies alongside the Act [^vic-11-1008], and the evidence code adds a privilege to resist disclosing trade secrets in litigation [^vic-5-858].
+
+This matters because trade-secret and confidentiality protection does not depend on the reasonableness test that makes non-competes hard to enforce. The Act both displaces conflicting common-law misappropriation remedies and preserves contractual ones, so a confidentiality agreement and the statutory claim work together [^vic-11-1008]. A narrowly drafted confidentiality and trade-secret program is often the more durable protection in the territory, and *Dixon* shows the risk of relying on a covenant without a documented protectable interest — the employer there failed to prove any trade secret worth protecting [^dixon-notrade].
+
+## Can an overbroad covenant run afoul of the Virgin Islands Antimonopoly Law? {#antimonopoly}
+
+**Short answer.** It may supply an additional, untested ground of attack. The Virgin Islands Antimonopoly Law makes it a violation to unreasonably restrain trade or commerce by *contract, combination, or conspiracy* [^vic-11-1503]. An employee challenging a sweeping covenant — especially in a small market where the restraint could foreclose competition — might invoke that statute alongside the common-law reasonableness defense.
+
+This is a secondary tool rather than the main event, and an untested one: the statute's concerted-action language (*combination or conspiracy with one or more other persons*) fits horizontal market conduct more naturally than a two-party employment covenant, and no Virgin Islands case has applied § 1503 to an employee non-compete. The day-to-day enforceability question is decided under the *Arvidson* reasonableness test. But the statute reinforces why a covenant that goes beyond protecting a legitimate interest is vulnerable, because the same overreach that fails the reasonableness test can also look like an unreasonable restraint of trade.
+
+## How are non-solicits, NDAs, and sale-of-business or LLC covenants treated? {#other-covenants}
+
+**Short answer.** An employee non-solicit that restrains competitive activity should be drafted to satisfy *Arvidson*'s reasonableness principles, because a restraint dressed up as a non-solicit is still a partial restraint of trade [^q10-arvidson]. Confidentiality and trade-secret clauses are supported separately by contract law and the Uniform Trade Secrets Act rather than by the non-compete test — though an overbroad confidentiality clause that operates as a de facto non-compete may draw similar scrutiny. Entity-governance covenants have a clear statutory foothold: the LLC statute expressly contemplates a court-ordered *covenant not to compete* as a term of a member buyout [^vic-13-1702].
+
+Broader sale-of-business covenants should still be analyzed under the same reasonableness principles. Mainland practice often treats a seller or departing owner who is paid for goodwill more favorably than an ordinary employee, because the legitimate interest is stronger and the hardship is offset by the purchase price — but in the Virgin Islands that more-favorable treatment is an inference from common-law context, not a territorial appellate holding. A sale-of-business covenant is still measured for reasonable duration, area, and scope, and a *worldwide* restraint on a Virgin Islands business will draw the same skepticism a worldwide employee covenant would.
+
+## Does the federal FTC non-compete ban apply, and which court decides a dispute? {#ftc-and-courts}
+
+**Short answer.** No. The Federal Trade Commission's 2024 Non-Compete Rule never took effect — a federal court set it aside, the FTC acceded to that result, and the Commission has now removed the rule from the Code of Federal Regulations [^ftc-removal]. Virgin Islands non-compete disputes are governed by territorial common law and decided in the first instance by the Superior Court, with appeals to the Supreme Court of the Virgin Islands and a separate federal track in the District Court of the Virgin Islands.
+
+> [!NOTE]
+> **Practice note.**
+>
+> Do not rely on guidance — including parts of the 2024–2025 commentary — that treats the FTC ban as live. As of February 2026 the rule has been removed from the CFR and is not operative [^ftc-removal]; enforceability turns entirely on Virgin Islands law. Separately, the FTC may still challenge individual covenants case-by-case under its general authority, but there is no across-the-board federal ban.
+
+For planning, the audience that matters is a Virgin Islands judge applying the *Arvidson* reasonableness test — not a federal rule. Where a dispute lands in the District Court on diversity or federal-question grounds, that court still applies Virgin Islands substantive law, informed by Third Circuit procedure.
+
+[^about]: By Steven Obiajulu, J.D. Published by [openagreements.org](https://openagreements.org). Last reviewed 2026-06-03. License: CC BY 4.0. Steven Obiajulu, J.D. is admitted in New York, not U.S. Virgin Islands. This article synthesizes U.S. Virgin Islands primary law and is not legal advice from a U.S. Virgin Islands-admitted attorney. This article is for informational purposes only and does not create an attorney-client relationship.
+
+[^arvidson-enforceable]: **Arvidson v. Buchar** — "Accordingly, the Arvidsons have met their summary judgment burden, and the Court finds the covenant to not compete invalid and unenforceable as a matter of law" *Arvidson v. Buchar, 2019 VI SUPER 122 (Super. Ct. V.I. Sept. 10, 2019).* <https://usvipublicportal-api.vicourts.org/courts/87edff36-c02b-4073-aea4-c0652bc123d9/cms/case/7432A3F8-AD71-45C5-B028-B4471D746A4E/docketentrydocuments/27b98266-7d9f-405f-b7ba-c221f8db0a97>
+
+[^vic-1-4]: **1 V.I.C. § 4 — Application of common law; restatements** — "shall be the rules of decision in the courts of the Virgin Islands in cases to which they apply, in the absence of local laws to the contrary." *1 V.I.C. § 4.* <https://advance.lexis.com/container?config=014DJAA3OWU1MmYyMC1kNzRhLTQ4NDAtYTMxZS01YzJhMzBkZDA0NDMKAFBvZENhdGFsb2dSOvVciRp0EcGxvMymeAXd>
+
+[^arvidson-rule]: **Arvidson v. Buchar** — "In accordance, this Court similarly adopts the same rule of reasonableness" *Arvidson v. Buchar, 2019 VI SUPER 122 (Super. Ct. V.I. Sept. 10, 2019).* <https://usvipublicportal-api.vicourts.org/courts/87edff36-c02b-4073-aea4-c0652bc123d9/cms/case/7432A3F8-AD71-45C5-B028-B4471D746A4E/docketentrydocuments/27b98266-7d9f-405f-b7ba-c221f8db0a97>
+
+[^arvidson-factors]: **Arvidson v. Buchar** — "This test of reasonableness must be applied to the following five factors 1 Is the duration of the restriction reasonable? 2 Is the area of restriction reasonable? 3 Is the interest of the employer reasonably protected? 4 Is undue hardship imposed on the employee? 5 Is the public interest reasonably protected?" *Arvidson v. Buchar, 2019 VI SUPER 122 (Super. Ct. V.I. Sept. 10, 2019).* <https://usvipublicportal-api.vicourts.org/courts/87edff36-c02b-4073-aea4-c0652bc123d9/cms/case/7432A3F8-AD71-45C5-B028-B4471D746A4E/docketentrydocuments/27b98266-7d9f-405f-b7ba-c221f8db0a97>
+
+[^arvidson-factintensive]: **Arvidson v. Buchar** — "reasonableness is a fact intensive inquiry that depends on weighing the totality of the circumstances" *Arvidson v. Buchar, 2019 VI SUPER 122 (Super. Ct. V.I. Sept. 10, 2019).* <https://usvipublicportal-api.vicourts.org/courts/87edff36-c02b-4073-aea4-c0652bc123d9/cms/case/7432A3F8-AD71-45C5-B028-B4471D746A4E/docketentrydocuments/27b98266-7d9f-405f-b7ba-c221f8db0a97>
+
+[^banks-section4]: **Banks v. International Rental & Leasing Corp.** — "The rules of the common law, as expressed in the restatements of the law approved by the American Law Institute, and to the extent not so expressed, as generally understood and applied in the United States, shall be the rules of decision in the courts of the Virgin Islands in cases to which they apply, in the absence of local laws to the contrary." *Banks v. Int'l Rental & Leasing Corp., 55 V.I. 967 (V.I. 2011).* <https://www.courtlistener.com/opinion/8676262/banks-v-international-rental-leasing-corp/#:~:text=The%20rules%20of%20the%20common,local%20laws%20to%20the%20contrary.>
+
+[^banks-method]: **Banks v. International Rental & Leasing Corp.** — "We conclude that the Legislature did not intend for section 4 of title 1 to compel this Court to mechanically apply the most recent Restatement." *Banks v. Int'l Rental & Leasing Corp., 55 V.I. 967 (V.I. 2011).* <https://www.courtlistener.com/opinion/8676262/banks-v-international-rental-leasing-corp/#:~:text=We%20conclude%20that%20the%20Legislature,apply%20the%20most%20recent%20Restatement.>
+
+[^connor-factors]: **Government of the Virgin Islands v. Connor** — "Rather, this Court has instructed that, instead of mechanistically following the Restatements, courts should consider ‘three non-dispositive factors’ to determine Virgin Islands common law: ‘(1) whether any Virgin Islands courts have previously adopted a particular rule; (2) the position taken by a majority of courts from other jurisdictions; and (3) most importantly, which approach represents the soundest rule for the Virgin Islands.’" *Gov't of the V.I. v. Connor, 60 V.I. 597 (V.I. 2014).* <https://cdnsm5-hosted.civiclive.com/UserFiles/Servers/Server_12810860/File/Opinions/Published/2014/File16.pdf>
+
+[^arvidson-scope]: **Arvidson v. Buchar** — "The Covenant to not compete does not pass the three pronged business interest test and, by failing to provide time, place, and manner restrictions, is overly broad and invalid" *Arvidson v. Buchar, 2019 VI SUPER 122 (Super. Ct. V.I. Sept. 10, 2019).* <https://usvipublicportal-api.vicourts.org/courts/87edff36-c02b-4073-aea4-c0652bc123d9/cms/case/7432A3F8-AD71-45C5-B028-B4471D746A4E/docketentrydocuments/27b98266-7d9f-405f-b7ba-c221f8db0a97>
+
+[^dixon-void]: **V.I. Diving Schools/Supplies, Inc. v. Dixon** — "restrictive clauses of the agreement are void and unenforceable as against public policy on the ground that they are unreasonable restraint on competition." *V.I. Diving Schools/Supplies, Inc. v. Dixon, Civ. No. 1046/1982 (Terr. Ct. V.I. Oct. 7, 1983).* <https://cdnsm5-hosted.civiclive.com/UserFiles/Servers/Server_12810747/File/Opinions/Archive/VI%20Diving%20Sch%20v.%20Dixon%20%28IAM%29.pdf>
+
+[^arvidson-consideration]: **Arvidson v. Buchar** — "is supported by valid consideration" *Arvidson v. Buchar, 2019 VI SUPER 122 (Super. Ct. V.I. Sept. 10, 2019).* <https://usvipublicportal-api.vicourts.org/courts/87edff36-c02b-4073-aea4-c0652bc123d9/cms/case/7432A3F8-AD71-45C5-B028-B4471D746A4E/docketentrydocuments/27b98266-7d9f-405f-b7ba-c221f8db0a97>
+
+[^arvidson-wda]: **Arvidson v. Buchar** — "24 V I C § 76 (the Virgin Islands Wrongful Discharge Act enumerating only nine reasons for which an employer may lawfully discharge an employee after qualifying for protection under the statute)" *Arvidson v. Buchar, 2019 VI SUPER 122 (Super. Ct. V.I. Sept. 10, 2019) (citing 24 V.I.C. § 76).* <https://usvipublicportal-api.vicourts.org/courts/87edff36-c02b-4073-aea4-c0652bc123d9/cms/case/7432A3F8-AD71-45C5-B028-B4471D746A4E/docketentrydocuments/27b98266-7d9f-405f-b7ba-c221f8db0a97>
+
+[^q5-arvidson-wda]: **Arvidson v. Buchar** — "24 V I C § 76 (the Virgin Islands Wrongful Discharge Act enumerating only nine reasons for which an employer may lawfully discharge an employee after qualifying for protection under the statute)" *Arvidson v. Buchar, 2019 VI SUPER 122 (Super. Ct. V.I. Sept. 10, 2019) (citing 24 V.I.C. § 76).* <https://usvipublicportal-api.vicourts.org/courts/87edff36-c02b-4073-aea4-c0652bc123d9/cms/case/7432A3F8-AD71-45C5-B028-B4471D746A4E/docketentrydocuments/27b98266-7d9f-405f-b7ba-c221f8db0a97>
+
+[^q6-arvidson]: **Arvidson v. Buchar** — "the soundest rule for the Virgin Islands is the equitable reformation approach" *Arvidson v. Buchar, 2019 VI SUPER 122 (Super. Ct. V.I. Sept. 10, 2019).* <https://usvipublicportal-api.vicourts.org/courts/87edff36-c02b-4073-aea4-c0652bc123d9/cms/case/7432A3F8-AD71-45C5-B028-B4471D746A4E/docketentrydocuments/27b98266-7d9f-405f-b7ba-c221f8db0a97>
+
+[^q6-arvidson-strict]: **Arvidson v. Buchar** — "Accordingly, the Court implements this rule with a greater willingness to refuse to reform agreements that are not reasonable on their face" *Arvidson v. Buchar, 2019 VI SUPER 122 (Super. Ct. V.I. Sept. 10, 2019).* <https://usvipublicportal-api.vicourts.org/courts/87edff36-c02b-4073-aea4-c0652bc123d9/cms/case/7432A3F8-AD71-45C5-B028-B4471D746A4E/docketentrydocuments/27b98266-7d9f-405f-b7ba-c221f8db0a97>
+
+[^q6-dixon]: **V.I. Diving Schools/Supplies, Inc. v. Dixon** — "restrictive clauses of the agreement are void and unenforceable as against public policy on the ground that they are unreasonable restraint on competition." *V.I. Diving Schools/Supplies, Inc. v. Dixon, Civ. No. 1046/1982 (Terr. Ct. V.I. Oct. 7, 1983).* <https://cdnsm5-hosted.civiclive.com/UserFiles/Servers/Server_12810747/File/Opinions/Archive/VI%20Diving%20Sch%20v.%20Dixon%20%28IAM%29.pdf>
+
+[^q7-arvidson]: **Arvidson v. Buchar** — "reasonableness is a fact intensive inquiry that depends on weighing the totality of the circumstances" *Arvidson v. Buchar, 2019 VI SUPER 122 (Super. Ct. V.I. Sept. 10, 2019).* <https://usvipublicportal-api.vicourts.org/courts/87edff36-c02b-4073-aea4-c0652bc123d9/cms/case/7432A3F8-AD71-45C5-B028-B4471D746A4E/docketentrydocuments/27b98266-7d9f-405f-b7ba-c221f8db0a97>
+
+[^vic-11-1001]: **11 V.I.C. § 1001 — Uniform Trade Secrets Act (short title)** — "This chapter may be cited as the Uniform Trade Secrets Act." *11 V.I.C. § 1001.* <https://advance.lexis.com/document/?pdmfid=1000516&pddocfullpath=/shared/document/statutes-legislation/urn:contentItem:56WP-9KS1-6G1M-90D3-00008-00>
+
+[^vic-11-1002]: **11 V.I.C. § 1002 — Definitions** — "‘Trade secret’ means information, including a formula, pattern, compilation, program, device, method, technique, or process" *11 V.I.C. § 1002.* <https://advance.lexis.com/document/?pdmfid=1000516&pddocfullpath=/shared/document/statutes-legislation/urn:contentItem:56WP-9KS1-6G1M-90D5-00008-00>
+
+[^vic-11-1008]: **11 V.I.C. § 1008 — Effect of other law** — "This chapter does not affect: (1) contractual remedies, whether or not based upon misappropriation of a trade secret" *11 V.I.C. § 1008.* <https://advance.lexis.com/document/?pdmfid=1000516&pddocfullpath=/shared/document/statutes-legislation/urn:contentItem:56WP-9KS1-6G1M-90DK-00008-00>
+
+[^vic-5-858]: **5 V.I.C. § 858 — Trade secrets privilege** — "A person has a privilege which may be claimed by him or his agent or employee, to refuse to disclose and to prevent other persons from disclosing a trade secret, owned by him, if the allowance of the privilege will not tend to conceal fraud or otherwise work injustice." *5 V.I.C. § 858.* <https://advance.lexis.com/document/?pdmfid=1000516&pddocfullpath=/shared/document/statutes-legislation/urn:contentItem:56WP-9JF1-6G1M-90PJ-00008-00>
+
+[^dixon-notrade]: **V.I. Diving Schools/Supplies, Inc. v. Dixon** — "Plaintiff Virgin Islands Diving Schools presented no evidence of any trade secrets which the Defendants obtained that is worthy of protection." *V.I. Diving Schools/Supplies, Inc. v. Dixon, Civ. No. 1046/1982 (Terr. Ct. V.I. Oct. 7, 1983).* <https://cdnsm5-hosted.civiclive.com/UserFiles/Servers/Server_12810747/File/Opinions/Archive/VI%20Diving%20Sch%20v.%20Dixon%20%28IAM%29.pdf>
+
+[^vic-11-1503]: **11 V.I.C. § 1503 — Violations enumerated** — "By contract, combination, or conspiracy with one or more other persons unreasonably restrain trade or commerce" *11 V.I.C. § 1503.* <https://advance.lexis.com/document/?pdmfid=1000516&pddocfullpath=/shared/document/statutes-legislation/urn:contentItem:56WP-9KS1-6G1M-90M3-00008-00>
+
+[^q10-arvidson]: **Arvidson v. Buchar** — "a contract which is only in partial restraint of trade may be valid and enforceable when it" *Arvidson v. Buchar, 2019 VI SUPER 122 (Super. Ct. V.I. Sept. 10, 2019).* <https://usvipublicportal-api.vicourts.org/courts/87edff36-c02b-4073-aea4-c0652bc123d9/cms/case/7432A3F8-AD71-45C5-B028-B4471D746A4E/docketentrydocuments/27b98266-7d9f-405f-b7ba-c221f8db0a97>
+
+[^vic-13-1702]: **13 V.I.C. § 1702 — Court action to determine fair value of distributional interest** — "a covenant not to compete or other restriction on a dissociated member" *13 V.I.C. § 1702.* <https://advance.lexis.com/document/?pdmfid=1000516&pddocfullpath=/shared/document/statutes-legislation/urn:contentItem:56WP-9M71-6G1M-90VX-00008-00>
+
+[^ftc-removal]: **Removal of the Non-Compete Rule from the CFR** — "this final rule removes the Non-Compete Rule codified at 16 CFR part 910 from the Code of Federal Regulations" *Removal of the Non-Compete Rule, 91 Fed. Reg. 6507 (Feb. 12, 2026).* <https://www.federalregister.gov/documents/2026/02/12/2026-02866/revision-of-the-negative-option-rule-withdrawal-of-the-cars-rule-removal-of-the-non-compete-rule-to>