Non-compete agreements are facing mounting scrutiny nationwide, and July 2026 brings two more data points to that trend. As of July 1, 2026, employers with workers in Virginia and Tennessee face new restrictions on non-compete agreements, following legislation both states enacted this spring. For employers with multi-state workforces, these changes carry real stakes: existing agreements may become unenforceable with little warning, and compliance requirements continue to diverge from state to state.
Virginia enacted Senate Bill 170, adding a new enforceability condition for non-competes. Under the new law, a post-employment non-compete is unenforceable against an employee terminated without cause unless the employer provides severance benefits or other monetary payment and discloses that payment at the time the non-compete agreement itself is executed, rather than at the time of termination. The law layers on top of Virginia’s existing ban on non-competes for low-wage and non-exempt employees, and applies to any agreement entered, amended, or renewed on or after July 1, 2026. The statute does not define “cause” or “severance benefits.”
Tennessee enacted House Bill 1034, rendering non-competes void for employees earning less than $70,000 in annualized compensation. For employees above that threshold, the law also includes provisions designed to improve the predictability and enforceability of restrictive covenants by creating rebuttable presumptions of temporal...
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