Quick Hits

• On March 24, 2025, Virginia Governor Glenn Youngkin signed SB128 into law, which significantly expands the existing scope of protection to low-wage employees against the enforcement of noncompete agreements.
• Starting on July 1, 2025, covenants not to compete will be prohibited against any employee who qualifies as a “low-wage employee,” meaning any employee who (i) earns less than the average weekly wage in Virginia (currently $1,463.10 weekly or $76,081 annually) or (ii) is entitled to overtime compensation under the FLSA.
• Employers that enter into, enforce, or threaten to enforce a covenant not to compete against a low-wage employee could be subject to injunctive relief, the payment of damages (including liquidated damages), attorneys’ fees, costs, and a civil penalty of $10,000 per violation.
• Covenants not to compete that were entered into (or renewed) before July 1, 2025, are not affected by the changes in the law.

Summary of Virginia’s Amended Noncompete Law

Virginia’s decision to ban noncompete agreements against low-wage employees is not entirely new. As we previously reported, Virginia enacted a law in 2020 that prohibits covenants not to compete against “low-wage employees.” Until recently, the term “low-wage employee” had been defined as an employee whose average weekly earnings are less than the average weekly wage in Virginia. In 2020, the salary threshold for a “low-wage employee” was approximately $62,000 per year. By 2025, that amount had...

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