Virginia Expands Noncompete Agreement Restrictions Again: Here’s Where Things Stand

Noncompete agreements, long a fixture of corporate employment, are coming under increasing scrutiny nationwide. Generally, such agreements prohibit former employees from working for their former employer’s competitors (or starting a competing business) for a fixed period in a specific geographic area. However, as restraints on free trade, courts view them with skepticism, and many states are moving to ban them entirely or severely restrict their enforceability. Virginia is among them, with the state recently expanding its noncompete agreement restrictions originally enacted in 2020 and previously expanded in 2025. Here, our Richmond noncompete lawyers explain what both employers and employees need to know about the enforceability of noncompete agreements in Virginia. 

Noncompete Agreements in Virginia Generally 

Noncompete agreements in Virginia generally are enforceable to the extent that they are reasonable in scope and one or more of the exceptions discussed below does not apply. Traditionally, Virginia courts enforced noncompete agreements only if the agreement at issue was: 

1. No broader than necessary to protect a legitimate business interest
2. Not unduly burdensome on the subject’s ability to earn a living
3. Not inconsistent with public policy 

The employer bears the burden of proving that the restriction is reasonable. When evaluating reasonableness, courts look to several factors, including: 

• Duration
• Geographic scope
• Scope of prohibited activities
• Whether the restriction is tied to the employee’s actual job duties
• Whether the employer has a legitimate business interest 

For more information about demonstrating that a particular noncompete agreement is reasonable or unreasonable, please seek the counsel of a Richmond noncompete lawyer. 

2020: Ban for Low-Wage Employees 

In 2020, Virginia enacted its first restrictions on noncompete agreements. Under Va. Code § 40.1-28.7:8, employers are barred from entering into, enforcing, or threatening to enforce a noncompete agreement with any low-wage employee. A “low-wage” employee is defined as an employee whose average weekly earnings are less than the average weekly wage in the Commonwealth as a whole. Section 40.1-28.7:8 creates a private right of action for employees to bring civil actions against former employers who attempt to enforce noncompete agreements in violation of its terms. Available damages include lost compensation, liquidated damages, and reasonable attorneys’ fees and costs. It also subjects employers who violate its terms to civil penalties of $10,000 for each violation. 

2025: Ban for Non-Exempt Employees 

In 2025, the state expanded its 2020 restrictions. Under the 2025 amendments, the ban now also applies to employees who, regardless of their average weekly earnings, are entitled to overtime compensation under the Fair Labor Standards Act (FLSA) for any hours worked in excess of 40 hours in any work week. Such employees are referred to as “non-exempt,” as they are not exempt from the FLSA’s minimum wage and overtime provisions. Generally, non-exempt employees are engaged in non-managerial work and are paid hourly, while exempt employees are engaged in managerial, executive, or administrative functions and are paid salaries. However, these categories are not always black-and-white, and disputes often arise over alleged employee misclassification. For more information about FLSA employee classification and its implications for noncompete agreements, please speak to a Richmond noncompete lawyer. 

2026: Ban for Without-Cause Terminations and Healthcare Workers

In 2026, Virginia again expanded its restrictions on noncompete agreements, this time for employees terminated without cause and healthcare workers. The new restrictions go into effect on July 1, 2026. 

Without-Cause Terminations 

Virginia Senate Bill 170 amends § 40.1-28.7:8 to add a provision stating that no noncompete agreement is enforceable if an employer terminates an employee without providing severance benefits to such employee unless the termination is for cause. Severance benefits must be disclosed upon the execution of the noncompete agreement. This expansion is significant, as it extends the state’s restrictions beyond low-wage employees to higher-level employees who previously were subject only to the traditional reasonableness requirement. 

Healthcare Workers

Virginia Senate Bill 128 amends § 40.1-28.7:8 to add healthcare professionals as a category of employee with whom employers may not enter into, enforce, or threaten to enforce a noncompete agreement. The bill defines a “healthcare professional” as any person licensed, registered, or certified by the Board of Medicine, Nursing, Counseling, Optometry, Psychology, or Social Work. However, there are two exceptions. First, the new restriction does not apply to noncompete agreements entered into as part of the sale of a business. Second, nothing in the new bill limits employers’ ability to require healthcare employees with fewer than five years of employment to repay recruitment-related costs, nor does it limit employers’ ability to include provisions requiring former healthcare employees to refrain from soliciting former customers. 

Preparing for the New Restrictions 

Given that SB 170 and SB 128 go into effect soon, our Richmond noncompete lawyers would encourage employers to consider taking the following steps now: 

• Audit existing noncompetes: Identify which employees are subject to noncompete agreements that may be affected by the new restrictions. 
• Revise noncompete templates: SB 170 requires that severance benefits or other monetary payments in consideration of noncompete agreements be disclosed when the agreements are executed. As such, employers should revise their noncompete agreement templates to address severance benefits. 
• Define “cause” carefully: SB 170 does not provide a definition of “for cause.” Employers should thus update employment agreements to define “cause,” as a well-documented termination for cause may preserve noncompetes that otherwise would become unenforceable. 
• Consider other agreements in lieu of noncompetes: The Virginia General Assembly has repeatedly restricted noncompete agreements, raising questions about their long-term viability. As such, employers should consider other mechanisms, such as confidentiality agreements, trade secret protection provisions, and non-solicitation agreements. 

Stay Ahead of the Curve With Help From a Richmond Non Compete Lawyer 

The enforceability of noncompete agreements is changing rapidly, and both employers and employees should prepare now for the near-certainty of future changes. For more information about the enforceability of noncompete agreements in Virginia, please contact a Richmond noncompete lawyer at Pierce / Jewett by calling 804-502-2320 or using our online contact form.