About Virginia Non Compete Law Center

Virginia Noncompete Laws: Essential Information for Employers and Employees Regarding New Restrictions Virginia’s legal landscape regarding noncompete agreements is undergoing a significant transformation, impacting both employers and employees. Effective July 1, 2025, Senate Bill 1218 (SB 1218), signed into law by Virginia Governor Glenn Youngkin, introduces sweeping changes to how businesses can utilize these restrictive covenants. The new Virginia law is codified at Virginia Code § 40.1-28.7:8. This article provides a comprehensive guide to the new Virginia noncompete laws, outlining the key changes, exploring the implications for both employers and employees, and offering practical advice for navigating this evolving legal terrain. This shift reflects a growing national trend towards limiting the use of noncompetes, particularly for lower-wage workers, aiming to foster greater employee mobility and competition.

Understanding these changes is crucial for Virginia businesses and their workforce. This article will delve into the specifics of SB 1218, defining key terms, explaining who is protected, and outlining the potential consequences of noncompliance. Understanding the Evolving Landscape of Noncompete Agreements in Virginia Traditionally, noncompete agreements have served as vital tools for businesses to protect their competitive edge. These agreements aim to prevent former employees from leveraging insider knowledge, client relationships, and trade secrets to benefit competitors or start competing ventures. This protection is particularly important in industries with highly specialized knowledge, extensive client networks, or valuable proprietary information.

For instance, a software company with proprietary code would use a noncompete to prevent a former engineer from joining a competitor and using that knowledge to develop a similar product. A recent study by the Economic Policy Institute found that noncompetes can stifle innovation and wage growth. Article originally published by Valley Business Front in Issue 193, October 2024: Valley Business FRONT, Issue 193, October 2024. In the 35 years that I have represented Virginia businesses and executives in workplace matters and litigation, I have lost count as to the number of times I have heard someone say words to... (Spoiler alert: they can be lawful.) This article provides answers, and an update. It is true that restraints against competition are not favored in Virginia.

They may be enforceable, however, when the agreement is “narrowly drawn to protect the employer’s legitimate business interest, is not unduly burdensome on the employee’s ability to earn a living, and is not against... Corp. v. US Investigations Servs., 270 Va. 246, 249 (2005). In evaluating these factors, courts consider the function, geographic scope, and duration of the restriction.

The function element is assessed “by determining whether the prohibited activity is of the same type as that actually engaged in by the former employer.” Home Paramount v. Schaffer, 282 Va. 412, 416 (2011). In other words, where the restriction only precludes the employee from doing competing work (as opposed to doing any work for a competitor), it is generally enforceable. Enforceable restrictions prohibit an employee from engaging in activities that actually or potentially compete with the employee’s former employer. Courts evaluate these cases on their own merits, equities, and context.

But the above concepts provide the framework for the types of non-compete agreements that may be enforceable in Virginia. Taking Fear And Intimidation Out Of The Legal Process, And Arming You With The Facts On Behalf of Hogan & Pritchard, PLLC | Oct 9, 2025 | Firm News | There’s been a lot of attention on non-compete agreements in recent years — particularly on how they’ve been overused by some employers. Even workers at fast-food chains have had non-compete clauses in their employment contracts, preventing them from getting work in the same industry if they left their employer. Despite the efforts of the Biden administration, changes to the law that would minimize the use of non-compete clauses on the federal level were blocked.

However, some states have changed their laws to limit “non-competes” to those employees with valuable skills and/or knowledge that could benefit a competitor if they went to work for them immediately after leaving an... Virginia’s new law regarding non-competes took effect this July. It’s intended to protect “low-wage” employees from having to agree to these restrictive and often financially harmful clauses. The law states, “No employer shall enter into, enforce, or threaten to enforce a covenant not to compete with any low-wage employee.” Whether working with our attorneys in estate planning, family law, business law or any of our other practice areas, we are committed to keeping you informed, prepared and protected. Stein Sperling attorneys understand the complexity of navigating the legal system.

That is why we prioritize effective communication as much as we prioritize the mechanics of the law. When working with our team, you will always know where you stand and what comes next. Posted in: Employment Law Tagged: Nidhi P. Patel Employers in Virginia who are currently using or planning on using restrictive covenant provisions in their employment contracts will have to update their contracts and policies come July 1, 2025. Virginia has amended its non-compete ban by redefining the salary threshold for non-exempt “low-wage employees”.

Virginia law prohibits employers from entering into, enforcing, or threatening to enforce covenant not to compete agreements with low-wage employees. Virginia broadly defines a “covenant not to compete” as any provision that restrains, prohibits, or otherwise restricts an employee’s ability, following the termination of his or her employment, to compete with his or her... Currently, a “low-wage employee” is defined as an employee whose average weekly earnings are less than the average weekly wage set by the Commonwealth, which, as of January 1, 2025, is $1,463.10 per week... At Fox & Moghul, we are Virginia’s top business and employment attorneys, specializing in non-compete agreements and restrictive covenants. Whether you are an employer seeking to protect trade secrets or an employee fighting an overbroad restriction, our legal team has extensive experience in drafting, negotiating, and litigating non-compete agreements across Fairfax, Arlington, Loudoun,... This guide covers everything you need to know about Virginia non-compete agreements, including key case law, enforceability standards, and common pitfalls.

A non-compete agreement (also known as a covenant not to compete) is a contractual restriction that prohibits an individual from working in a specific field or geographic area after leaving a company. Employers use non-competes to protect confidential information, trade secrets, and client relationships from competitors. Common Uses of Non-Competes in Virginia:✔️ Preventing former employees from working for direct competitors✔️ Restricting contractors or partners from soliciting clients✔️ Protecting proprietary business practices from being used by competitors Virginia Law: Enforceability of Non-Compete Agreements Beginning July 1, 2025, a significant change to Virginia employment law will take effect, further strengthening protections for workers across the Commonwealth. Under the newly enacted legislation, Senate Bill 1218, employers will be prohibited from entering into or enforcing non-compete agreements with any employee classified as non-exempt under the federal Fair Labor Standards Act (FLSA), regardless...

This marks a major expansion of Virginia’s existing non-compete restrictions, which since 2020 have only applied to “low-wage” employees based on a defined salary threshold. With this new law, classification rather than compensation will be the controlling factor. A non-compete agreement is a contractual provision that restricts an employee from working for a competitor or starting a competing business for a certain period of time after leaving a company. While these agreements are intended to protect business interests, they can also often limit an employee’s job mobility and earning potential. As of July 1, 2025, any employee classified as non-exempt under the FLSA will be covered by the non-compete ban. Non-exempt employees are typically hourly workers who are entitled to overtime pay.

This classification encompasses a wide range of occupations and industries, including administrative, technical, customer service, retail, healthcare, and skilled trades. Previously, the law only covered employees earning less than the average weekly wage in Virginia, amounting to about $76,000 per year. Under the new legislation, that income-based limitation will no longer apply. If you work in the Commonwealth of Virginia and have signed a contract with your employer containing a non-compete clause, you may face legal consequences if you violate that agreement. You should know how this can affect you in the event that you are terminated or decide to switch jobs. The Erlich Law Office can help you evaluate and navigate these situations, whether you work for a defense contractor in Fairfax, a non-profit in Alexandria, or a tech startup in Tyson’s Corner.

As discussed below, Virginia has enacted a ban on non-compete agreements for “low-wage employees.” If that applies to you, your non-competition agreement may be invalid. A non-compete agreement is a contractual promise—or, as it is sometimes called, a restrictive covenant—between two parties, usually employee and employer, governing the behavior of the employee after the end of employment. The purpose of a non-compete agreement is to guarantee the former employee will not engage in certain acts, behaviors, or new employment that competes with the former employer’s business. Employers often use non-compete agreements to ensure that when they share trade secrets, ideas, and business practices with their employees, partners, and contractors, those individuals won’t leverage that information to start their own business... You may be subject to a non-compete agreement even if you don’t have access to trade secrets. If you are a worker in Virginia who signed a non-compete agreement (or signed a contract containing a non-compete clause), that isn’t the end of the story.

Non-compete agreements still need to pass a test to be valid. In Virginia, non-compete agreements are enforceable if an employer can show: See Assurance Data, Inc. v. Malyevac , 286 Va. 137, 144 (2013).

Katie dedicates her practice to employment separation guidance and labor law, representing employers, select executives, and employees. Katie is admitted to practice in Virginia and Washington, DC, and has been specially admitted to litigate non-compete cases in Maryland and Delaware. Along with a focus on employment and labor law, Katie has a broad legal background in government contracts, construction, corporate law, and civil litigation. Katie’s opposing counsel would describe her as creative, passionate, and a fierce advocate for her clients. She is always mindful of her clients’ budget and most happy when she is able to settle a matter without having to go through the litigation process but is prepared to take matters to... Her corporate clients have employees nationwide and call on her to resolve matters involving employment terminations, severance agreements, non-competes, and complicated HR matters.

Katie enjoys representing technology companies, given her firm’s proximity to the Northern Virginia tech corridor. Katie also has traditional labor law experience, covering labor arbitration, collective bargaining agreement negotiations, and National Labor Relations Board charge defense.

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