What Virginia Employers Need to Know About Non-compete Agreements in 2026

Important changes to Virginia’s non-compete law went into effect on July 1, 2026.

Virginia employers should review their non-compete agreements to ensure compliance with the new law before asking employees to sign them or seeking to enforce them.

The amended law adds a payment requirement for certain employees discharged without cause and prohibits employers from entering or enforcing non-competes for certain health care professionals. These changes build on existing protections for low-wage employees, including workers entitled to overtime regardless of earnings.

Who Can Still Be Subject to a Virginia Non-compete in 2026?

Virginia employers should first check whether a worker is a “low-wage employee” under Virginia law. If a worker falls within the low-wage employee definition, then they cannot legally be subject to a non-compete in Virginia. Low-wage workers include workers whose average weekly earnings fall below the Commonwealth’s statutory threshold, and workers entitled to overtime under the federal Fair Labor Standards Act, regardless of earnings. Virginia law also considers certain interns, trainees, and lower-paid independent contractors to be low-wage employees and has an exception for employees paid wholly or predominantly through commissions, incentives, or bonuses. Next, check whether the person is a covered health care professional – these employees also cannot be subject to a non-compete in Virginia.

For other employees, enforceability still depends on the terms of the covenant and, for agreements subject to the 2026 amendments, the rules governing discharge without cause.

Termination Without Cause Now Requires Advance Planning

For agreements entered into, amended, or renewed on or after July 1, 2026, a Virginia employer cannot enforce a non-compete after terminating an employee without cause unless it provides severance benefits or another monetary payment. The employer must disclose that benefit or payment when the non-compete agreement is executed. The law does not specify a minimum payment or define cause. Employers should clearly describe the payment obligation and consider defining “cause” in the agreement.

A Separate Ban Protects Specified Health Care Professionals

The 2026 law prohibits non-competes for people licensed, registered, or certified by Virginia’s Boards of Medicine, Nursing, Counseling, Optometry, Psychology, or Social Work. Coverage turns on the licensing board, rather than compensation or job title. Employers should verify the regulator for each professional instead of assuming all health care occupations are treated alike.

However, this restriction generally does not apply to a qualifying sale of a business if the statutory conditions are met. The law also allows appropriately tailored customer non-solicitation provisions for health care professionals. Such provisions cannot prevent a departing health care professional from informing a patient whom the professional was consulting with or treating before departure about the professional’s continuing practice, new contact information, and the patient’s right to choose a health care professional.

The Agreement Date Matters

Employers should audit when each covenant was signed and whether it has since been amended or renewed. The applicable law may depend on that history, so employers should not assume an older agreement remains enforceable simply because it was valid when originally signed. Have the company’s employment lawyer evaluate the relevant statutes before revising an existing covenant or relying on its original signature date.

Narrow Drafting Remains Essential

Even when no statutory prohibition applies, an employment non-compete must protect a legitimate business interest, avoid undue hardship on the employee’s ability to earn a living, and comply with public policy. Virginia courts consider the restricted activities, geographic reach, and duration together when determining a non-compete’s enforceability.

The drafting question is practical: What competitive activity would harm the business? If the concern is customer relationships or confidential information, a carefully tailored non-solicitation or confidentiality provision, rather than a non-compete, may address it more directly. Restrictions should reflect the employee’s responsibilities and contacts.

Review Enforcement Decisions and Workplace Notices

Violations of the statutory prohibitions or payment requirement can result in a $10,000 civil penalty per violation, as determined by the Commissioner. Employees and health care professionals may also seek relief in court through a civil action, including injunctive relief, damages, and attorneys’ fees and costs. Therefore, any demand letter contemplated by an employer should be reviewed by an experienced employment law attorney before it is sent.

Virginia law also requires every employer to post either a copy of the non-compete statute or a summary approved by the Department of Labor and Industry in the same location where other required employee notices are posted. Employers that fail to comply may receive a written warning for a first violation, a civil penalty of up to $250 for a second violation, and a civil penalty of up to $1,000 for each subsequent violation.

Steps Employers Can Take Now

• Audit agreements by employee role, compensation, overtime eligibility, licensing board, and execution or renewal date.
• Update payment disclosures and termination procedures for covenants subject to the 2026 severance requirement.
• Tailor restrictions to actual competitive duties and customer relationships and revisit them when responsibilities change.
• Review the governing law for each work location. Multistate employers should not assume a Virginia choice-of-law provision resolves another state’s restrictions.
• Check enforceability before sending a demand letter, and update required workplace notices.

A focused review now can identify agreements that no longer serve their intended purpose and help employers choose lawful protections before a departure becomes a dispute.

Lipp Law advises Virginia employers on drafting, reviewing, and enforcing noncompete, non-solicitation, confidentiality, and other restrictive covenant agreements. We can review existing agreements before an employer enters into a new agreement, terminates an employee, or takes steps to enforce a restriction. Contact Lipp Law.