Enforcing non-compete agreements became more complex in Virginia as two amendments to Virginia’s non-compete statute took effect July 1, 2026. One requires severance or other pay for a non-compete to be enforceable when the employee’s employment is terminated without cause. The second prohibits employment non-competes with certain health care professionals. Both changes operate alongside the 2025 expansion of Virginia’s protections for “low-wage employees.” Virginia employers using non-competes will need to review their agreements to ensure compliance with these new requirements.
Under Senate Bill 170, an employer cannot enforce a non-compete against an employee whose employment is terminated without cause unless the employer provides severance benefits or another monetary payment to the employee. The employer must disclose the severance or other payment obligation to the employee when the non-compete is signed. Without that disclosure, an employer may not be able to make the existing non-compete enforceable by providing a payment or negotiating severance at the time of termination. The change applies across industries and is not limited to lower-paid employees.
The statute does not define “cause,” establish a minimum payment amount, or expressly require “garden leave”-type payments throughout the restricted period. As a result, the text leaves questions about the payment terms that would be sufficient to satisfy the condition and the...
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