Virginia continues to narrow the enforceability of employee non-compete agreements. Beginning July 1, 2026, new legislation significantly expands protections for workers by limiting when employers may enforce post-employment non-compete restrictions.

For employees, these changes alter not only whether a non-compete applies, but also what rights exist if an employer attempts to enforce one. Understanding how these rules work is essential for anyone entering, reviewing, or exiting an employment agreement in Virginia.

Virginia’s Existing Limits on Non-Compete Agreements

Virginia law already places substantial restrictions on non-compete agreements for certain categories of workers. Employers are prohibited from entering into, enforcing, or threatening to enforce non-compete agreements against “low-wage employees.” This category includes:

• employees earning below Virginia’s average weekly wage (approximately $78,000 annually as of 2026, according to the Virginia Department of Labor and Industry)
• employees classified as non-exempt under the Fair Labor Standards Act (i.e., eligible for overtime pay); and
• interns, apprentices, trainees, and certain independent contractors.

These restrictions already apply regardless of whether the employee signed a non-compete agreement. In many cases, such agreements are void as a matter of law.

What Changes on July 1, 2026

New legislation signed by Virginia Gov. Abigail Spanberger in April 2026 expands these protections beyond low-wage workers and imposes new conditions on enforceability for other employees.

Non-Competes After Termination Without Cause

Effective July 1, 2026, a non-compete agreement will generally be unenforceable if the employer terminates the employee without cause, and the employee does not receive severance pay or other monetary compensation tied to the non-compete

To preserve enforceability, employers must provide severance or other compensation and disclose that compensation at the time the agreement is executed.

This represents a significant shift. Employers may no longer rely on non-competes following layoffs or other separations without cause unless they have effectively “paid for” that restriction in advance.

Expanded Protections for Higher-Earning Employees

Prior Virginia law primarily focused on protecting lower-wage and non-exempt workers. The new statute extends important protections to a broader group.

Beginning July 1, 2026, the severance requirement applies to non-compete agreements involving all employees, including higher earners and exempt professionals.

As a result, even well-compensated employees may be released from non-compete obligations if terminated without cause and enforceability now depends not just on salary level, but also on how the employment relationship ends

Prospective Application Only

The new law is not retroactive. It applies only to non-compete agreements that are:

• entered into on or after July 1, 2026; and
• amended or renewed on or after that date.

Agreements signed before July 1, 2026 remain governed by prior law, although ongoing enforcement may still be subject to judicial scrutiny.

Types of Agreements That Remain Enforceable

Importantly, the statute targets non-compete agreements specifically. Other restrictive covenants may still be enforceable, including:

• non-disclosure agreements (NDAs) protecting confidential information and trade secrets; and
• customer non-solicitation provisions, when properly limited. [legalclarity.org]

This means that even if a non-compete is invalid, employees may still be restricted from using proprietary information or soliciting former clients or customers

Additional Industry-Specific Restrictions

Separate legislation also imposes additional limits on non-competes in certain sectors. For example, Virginia has enacted restrictions affecting licensed health care professionals, further limiting employers’ ability to enforce non-compete agreements in that field.

Employees in regulated professions should review their agreements carefully in light of these evolving rules.

Employee Rights and Remedies

Virginia law provides employees with meaningful enforcement mechanisms if an employer attempts to impose an unlawful non-compete agreement.

Employees may:

• challenge the enforceability of a non-compete in court;
• seek to have the agreement declared void; or
• recover damages, including compensation and attorney fees.

Employers that violate the statute may also face civil penalties, which can reach $10,000 per violation, enforced by the Virginia Department of Labor and Industry (or via litigation).

Practical Considerations for Employees

Employees should take a proactive approach when evaluating non-compete agreements. Before signing a non-compete agreement, employees should:

• confirm whether you fall into a protected category (e.g., non-exempt employee);
• review whether any severance obligation is clearly stated; and
• ensure compensation tied to the non-compete is disclosed in writing

When leaving a job, employees should:

• determine whether your departure is classified as “for cause” or not; and
• if terminated without cause, assess whether the employer provided the required severance consideration.

If enforcement is threatened, employees should seek legal review before assuming the agreement is valid, as many non-competes may now be unenforceable under Virginia law.

Virginia’s Shift Toward Limited Use of Non-Compete Agreements

Virginia’s latest legislation reflects a continued shift toward limiting the use of non-compete agreements in the employment context. As of July 1, 2026:

• many workers are already fully protected from non-competes;
• others gain new protections when terminated without cause; and
• employers must now provide advance compensation to enforce certain agreements.

While non-competes remain permissible in limited circumstances, they are increasingly restricted and subject to careful judicial scrutiny.

Employees navigating hiring, termination, or transitions to new employment should understand how these evolving laws affect their rights — and when a non-compete may no longer be enforceable.

More information on other new Virginia employment laws can be found here.

A knowledgeable employment attorney can help you gain an understanding of the unique difficulties each workplace conflict presents and work toward a solution that benefits you. Tully Rinckey attorneys have the experience to assist both employees and employers in achieving their objectives, regardless of the matter, which may include discrimination, harassment, retaliation, or any other claim involving worker rights or employer responsibilities. Call 8885294543 or contact us online today for a consultation and get an advocate who will fight for your rights and help secure your career and your future.

As Senior Counsel, Pamela focuses her practice on federal employment law and employment law matters originating in the Commonwealth of Virginia. Pamela has extensive experience representing clients in federal administrative hearings before the U.S. EEOC and the Merit Systems Protection Board. She also has litigation experience in the Eastern District of Virginia, Richmond, and Norfolk Divisions. Pamela regularly represents Virginia clients in state agency grievances, local personnel Board hearings, unemployment hearings, and before the Virginia Board of Nursing, Medicine and Pharmacy.