Allowed above a pay floor

Non-compete law in Virginia

Virginia bans noncompetes for 'low-wage employees' (workers whose average weekly earnings are below the Commonwealth's average weekly wage, anyone entitled to FLSA overtime, interns/students/apprentices, and low-hourly-rate independent contractors; commission-based earners are excluded from the definition) and, for agreements entered or renewed on or after July 1, 2026, for health care professionals. Also for agreements entered, amended or renewed on or after July 1, 2026, a noncompete is unenforceable against an employee fired without cause unless severance or other monetary payment was disclosed when the covenant was signed. Higher-paid, non-health-care workers are governed by the general common law, not a statute.

Last verified · confidence medium. Clauseworthy is not a law firm and does not give legal advice.

Employee non-competes
Only within the statute's conditions
Pay floor
$1,507.01 a week in 2026, adjusted annually
How pay is measured
Ban applies BELOW this level: 'low-wage employee' = average weekly earnings over the 52 weeks before termination (or fewer weeks actually paid) less than the Commonwealth average weekly wage under Va. Code § 65.2-500(B), OR anyone entitled to FLSA overtime (29 U.S.C. § 207) regardless of pay. § 65.2-500(B) has the Workers' Compensation Commission set the figure each January 1 from Virginia Employment Commission wage data, applicable to injuries from the following July 1; the Commission publishes $1,507.01 as the maximum compensation rate effective 2026-07-01 (it was $1,463.10 from 2025-07-01), and § 65.2-500(A) caps the maximum rate at 100% of the average weekly wage. Treating $1,507.01/week (about $78,364.52/year at 52 weeks) as the statutory figure is an inference from that link, not a number the covenant statute itself states; § 65.2-500(B) also says the figure is 'rounded to the nearest dollar', which the published $1,507.01 does not reflect. Corroboration: the Commission's published minimum compensation rate for 2026-07-01 ($376.75) is 25% of $1,507, consistent with an average weekly wage of about $1,507.
Notice
No statutory notice period. The severance or other monetary payment that makes a covenant enforceable after a without-cause discharge must be disclosed when the covenant is executed (§ 40.1-28.7:8(C)). Employers must post the statute or a Department-approved summary with other workplace notices (§ 40.1-28.7:8(G)).
Pay during the restriction
Not required. For agreements entered, amended or renewed on or after 2026-07-01, a covenant is unenforceable if the employer discharges the employee without cause and without providing severance or other monetary payment; the statute does not define 'severance', 'cause' or 'discharge' and does not require pay for the full restricted period (§ 40.1-28.7:8(C); 2026 Acts c. 883).

Exceptions and special rules

  • Sale of a business: the statute allows a non-compete given by a seller.
  • Nondisclosure agreements protecting trade secrets (as defined in § 59.1-336) and proprietary or confidential information are not limited (§ 40.1-28.7:8(H)(1))
  • A 'covenant not to compete' does not restrict an employee from servicing a customer or client of the former employer if the employee does not initiate contact or solicit (§ 40.1-28.7:8(A))
  • Employees whose earnings come in whole or predominant part from sales commissions, incentives or bonuses are excluded from the 'low-wage employee' definition (§ 40.1-28.7:8(A))
  • Health care professionals: sale-of-business covenants (sale of all or substantially all operating assets with goodwill, or ownership interest) are allowed if reasonable in scope, duration and geography (§ 40.1-28.7:8(H)(2)); recruitment/relocation/training cost repayment for professionals employed fewer than five years and narrowly construed customer non-solicits remain valid (§ 40.1-28.7:8(I))
  • No statutory sale-of-business carve-out is stated for non-health-care workers; the ban reaches only low-wage employees, so a sale covenant by a higher-paid seller is outside the statute
  • Health care professional (anyone licensed, registered or certified by the Boards of Medicine, Nursing, Counseling, Optometry, Psychology or Social Work). No employer may enter into, enforce or threaten to enforce a covenant not to compete with a health care professional, regardless of pay (§ 40.1-28.7:8(B)). Carve-outs: reasonable sale-of-business covenant (H)(2); repayment of recruitment-related costs, relocation, signing/retention bonuses and training costs from a professional employed fewer than five years (I)(1); narrowly construed customer non-solicit limited to customers with whom the professional had material contact, and the professional may still tell a patient seen before departure about continuing practice, new contact details and the patient's right to choose a provider (I)(2). Does not alter covenants entered into or renewed before 2026-07-01 (2026 Acts cc. 1113 and 1114, enactment clause 2). (Va. Code § 40.1-28.7:8(B), (H)-(I); 2026 Acts cc. 1113, 1114)
  • Franchisee under the Virginia Retail Franchising Act (franchise with a place of business in Virginia). It is unlawful to offer or enter into a franchise agreement that restricts the franchisee from offering, selling or distributing goods or services at retail after the franchise agreement ends. Exception: when the franchisee sells the franchise at a mutually agreed price to a third party or back to the franchisor, the sale may restrict the franchisee for no more than two years. Added by 2026 Acts cc. 553 and 554 (effective 2026-07-01 under Va. Code § 1-214, derived; the chapters themselves were not read). (Va. Code § 13.1-563(A)(4), (B); § 13.1-559(B))

Non-solicitation clauses

The statute regulates 'covenants not to compete' only; a clause that merely stops an employee from soliciting or initiating contact with customers is not restricted for ordinary employees. For health care professionals, customer non-solicits limited to material-contact customers and substantially similar services are expressly allowed (§ 40.1-28.7:8(A), (I)(2)). Employee non-solicit/no-hire clauses are not addressed by the text.

Contracts naming another state's law

None in § 40.1-28.7:8 (no choice-of-law or forum rule).

Remedies

Employee or health care professional may sue within two years of the latest of: covenant signed, employee learns of it, employment ends, or the employer takes a step to enforce; court may void the covenant and award injunction, liquidated damages, lost compensation, damages and attorney fees and costs, and retaliation is barred (§ 40.1-28.7:8(D)); a prevailing plaintiff recovers costs, expert fees and attorney fees (F). The Commissioner of Labor and Industry may assess a civil penalty of $10,000 per violation of the ban or the severance rule (E); poster-violation penalties are a warning, then up to $250, then up to $1,000 (G).

Which agreements it covers

Each change applies prospectively: 2025 c. 585 not to contracts entered into or renewed before 2025-07-01; 2026 c. 883 (severance rule) not to contracts entered into, amended or renewed before 2026-07-01; 2026 cc. 1113/1114 (health care professionals) not to contracts entered into or renewed before 2026-07-01. >= 2026-07-01 for the health care and severance rules; >= 2025-07-01 for the overtime-eligible prong of 'low-wage employee'

Recent changes

  • 2026-07-01. 2026 Acts c. 883 (SB 170, approved 2026-04-13) added subsection C: a covenant is unenforceable if the employer discharges the employee without cause and without disclosed severance or other monetary payment; any 'employee' (not only low-wage) may sue under the section. Effective 2026-07-01 under Va. Code § 1-214(A). Source
  • 2026-07-01. 2026 Acts cc. 1113 (HB 627, approved 2026-05-14) and 1114 (SB 128; identical text) added the health care professional ban and its sale-of-business, cost-repayment and non-solicit carve-outs. Source
  • 2026-07-01. Average weekly wage figure (Commission's published maximum compensation rate) rose from $1,463.10 to $1,507.01; next annual change effective 2027-07-01. Source
  • 2026-07-01. 2026 Acts cc. 553 and 554 (HB 69 / SB 240 per a secondary source) amended the Retail Franchising Act: post-term noncompetes in franchise agreements are unlawful except a restriction of up to two years on a franchisee who sells the franchise (Va. Code § 13.1-563(A)(4), (B)). Effective date derived from § 1-214. Source
  • 2025-07-01. 2025 Acts c. 585 (SB 1218, approved 2025-03-24) added to the 'low-wage employee' definition anyone entitled to FLSA overtime (29 U.S.C. § 207) regardless of earnings; enactment clause: no effect on contracts entered into or renewed before 2025-07-01. (Other wording changes in the chapter were not itemized.) Source

Primary sources

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