Virginia Expands Limits On Non-Competes

Virginia already precludes covenants not to compete with “low-wage employees” who earn less than the average weekly wage in Virginia or who are not exempt from overtime under the federal Fair Labor Standards Act. Effective July 1, 2026, Virginia’s prohibition on covenants not to compete will extend to employees who are terminated by their employer without cause unless the employer provides severance or other monetary payment to the terminated employee.

The new statute provides that:

No covenant not to compete between an employer and an employee is enforceable if such employer discharges such employee from employment without providing severance benefits or other monetary payment to such employee, unless such employer discharges such employee for cause. Such severance benefits or other monetary payment shall be disclosed upon execution of the covenant not to compete.