We recently reported on a new noncompete law in Virginia, effective July 1, 2026, that requires employers to pay severance in order to enforce a noncompete agreement against an employee terminated without cause. Virginia lawmakers passed another law, HB 627, also effective July 1, 2026, banning noncompete agreements with “health care professionals.” HB 627 is not retroactive and therefore does not apply to (or affect) any agreement entered prior to July 1, 2026.
Current Virginia law prohibits noncompete agreements with “low-wage employees.” HB 627 extends this prohibition to “health care professionals,” defined as any person licensed, registered, or certified by the Board of Medicine, Nursing, Counseling, Optometry, Psychology, or Social Work.
Exceptions
Virginia’s existing prohibition for low-wage employees includes one exception — it allows employers to enter nondisclosure agreements with low-wage employees that are intended to protect trade secret and confidential information. HB 627 adds a sale-of-business exception, which lawmakers commonly include in prohibitions like this one. HB 627 also specifically allows agreements requiring health care professionals to repay their employer for recruitment-related costs, including relocation expenses, signing or retention bonuses, and other payment(s) provided to induce relocation or establishment of a practice (sometimes referred to as “TRAP agreements”). This exception allows employers to recoup qualifying expenses from a...
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