Virginia has enacted a law expanding limits on noncompete agreements for certain employees, law firm Holland & Knight reported April 27..
The law, SB 170, bars enforcement of noncompete agreements for employees who are discharged without severance benefits or other monetary payment, unless the employee is terminated for cause. It takes effect July 1, 2026, and applies prospectively.
The policy builds on existing restrictions covering “low wage employees,” defined as those earning less than $1,507.01 per week, or $78,364.52 annually, as well as employees classified as nonexempt under the Fair Labor Standards Act.
Under the new law, severance or other monetary payment must be disclosed at the time a noncompete agreement is executed. Agreements entered into, amended or renewed before July 1, 2026, are not affected.
Employers that violate the law are subject to a civil penalty of $10,000 per violation, plus reasonable costs and attorney fees.
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