Virginia and Tennessee will both impose new restrictions on noncompete agreements starting July 1, 2026, adding to a growing wave of state-level limits on the employment clauses that affect tens of thousands of healthcare workers.
According to a June 22 report by law firm Ogletree & Deakins, Virginia’s law targets a specific enforcement gap. After July 1, noncompete covenants will now be unenforceable if an employer terminated an employee without severance pay — unless the termination was for cause. Any severance or other monetary payments used to support a noncompete’s enforceability must be disclosed to the employee at the time the agreement is signed. Virginia also expanded its existing ban on noncompetes for “low-wage” workers to cover all healthcare professionals, regardless of salary.
Tennessee’s law is broader in scope, prohibiting noncompete agreements for any worker earning less than $70,000 per year.
The two laws arrive as regulators at the federal level have also pressed the issue. The Federal Trade Commission sent warning letters to large healthcare staffing firms and employers in September 2025, flagging potentially unlawful noncompetes affecting nurses, physicians and other clinical staff.
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