Virginia Tightens Noncompete Rules With New Statewide Law
Virginia's Senate Bill 170, signed April 13, 2026, broadens restrictions on noncompete agreements statewide.
Why it matters: All employers and legal counsel in Virginia must reassess noncompete and employment agreements before July 1, 2026, as enforceability for new contracts will tighten. The law boosts employee mobility and exposes employers to new compliance risks—and penalties—for missteps.
- Noncompete agreements signed after July 1, 2026, are unenforceable if employees are terminated without cause and do not receive severance or disclosed pay.
- The law applies to all Virginia employees, not just low-wage workers, for agreements entered into after the effective date.
- Employers face civil penalties of $10,000 per violation and must post notice of the law or risk $1,000 fines.
- Ambiguity remains over the law’s definition of 'cause' and whether non-solicitation agreements are restricted.
Virginia Governor Abigail Spanberger signed Senate Bill 170 into law on April 13, 2026, marking a major step in the state’s protection of workers’ rights. The law amends Section 40.1-28.7:8 of the Code of Virginia and applies to all noncompete agreements entered into, amended, or renewed on or after July 1, 2026.
- Termination terms matter: If an employer terminates an employee without cause and fails to provide severance or other disclosed monetary compensation, any noncompete agreement is rendered unenforceable.
- Wider scope: Unlike earlier statutes, this law covers all employees—not just those classified as low-wage workers—expanding its impact beyond the average weekly wage threshold of $1,507.01.
- Employer obligations: Employers must post the new law or an approved summary where employment notices are typically displayed; failure to comply may draw penalties up to $1,000. Violations for enforcing invalid agreements may result in civil penalties of $10,000 per case.
- Employee remedies: Workers can bring civil actions against employers enforcing illegal noncompetes, with available remedies including injunctions, liquidated damages, lost compensation, and attorney fees.
- Caveats and gaps: The law does not define "cause" for termination, and does not clarify if non-solicitation clauses are included—though Virginia courts have upheld non-solicitation covenants. Notably, the bill does not affect nondisclosure agreements for trade secrets or proprietary information.
Sen. Schuyler VanValkenburg underscored the intent, stating, "We’re taking a highly mobile workforce where we already have a shortage and telling them if they want to move on professionally, they have to go to another state. That doesn’t help Virginia."
Existing agreements entered into before July 1, 2026, are not impacted, so legal teams should review onboarding and contract renewal schedules to ensure compliance with these new standards.
By the numbers:
- $10,000 — Civil penalty per violation for enforcing unlawful noncompete agreements
- $1,000 — Maximum penalty for failure to post required notice
- $1,507.01 — Current average weekly wage in Virginia for low-wage rule
Yes, but: The bill leaves key terms like 'cause' for termination undefined, creating enforcement uncertainties, and does not clarify whether non-solicitation clauses are impacted.
What's next: Employers must ensure all noncompete agreements signed, amended, or renewed after July 1, 2026, comply with the new law, and update posting practices before that date.