At a glance
- Virginia has enacted an amendment significantly restricting the enforceability of non‑compete agreements, effective July 1, 2026.
- Post‑termination non‑competes will generally only be enforceable if the employer provides severance, unless the employee is terminated for cause.
- Non‑competes are almost entirely prohibited for healthcare professionals, except in a sale‑of‑business context.
- Recent Virginia appellate case law means the new rules are also expected to affect many non‑solicitation provisions.
- The amendment replaces the prior, narrower ban that applied only to low‑wage employees and is not retroactive.
Virginia enacted an amendment to its non-compete law. Effective July 1, non-competes are only enforceable against terminated employees in Virginia if the employer provides severance (unless the employee is terminated for cause) and non-competes are almost categorically banned for healthcare professionals (other than in the sale-of-business context). Moreover, because of recent case law from the Virginia Court of Appeals, the new legislation will also apply to many non-solicits. Previously, Virginia only prohibited non-competes for 'low-wage employees', including non-exempt employees and those earning less than approximately USD78,000 per year.
The amendment is not retroactive and only applies to agreements entered into or amended after July 1, 2026. Companies with Virginia employees are encouraged to (1) update their forms in anticipation of the July 1 effective date, and (2) consider whether any current employees should sign restrictive covenants now so that the covenants can be grandfathered in.
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