Key Takeaways

• Effective July 1, in Virginia, post‑termination noncompetes will be void and unenforceable for employees terminated without cause unless the employer provides severance or other monetary payment disclosed at the time of execution.
• The amendment applies to all Virginia employees. Unlike prior law limited to “low‑wage employees,” SB 170 applies regardless of compensation, job title or exemption status, though existing pre‑July 1 agreements remain unaffected.
• Employers should update restrictive covenant templates to comply with the new law, including defining “cause” carefully and adding disclosed severance where covenants not to compete are used.
• Employers must also update required workplace postings to comply with the new law.

Virginia has enacted new legislation, SB 170, which amends Virginia Code Section 40.1-28.7:8 and further restricts the enforceability of noncompete agreements in the Commonwealth. Effective July 1, post-termination covenants not to compete will be void and unenforceable against employees who are terminated by the company without cause unless the employer provides “severance benefits or other monetary payment to the employee.” The severance benefits or other monetary payment must be disclosed at the time the covenant not to compete is executed. SB 170 applies only to noncompetes entered into, amended or renewed on or after July 1. Existing agreements executed before that date are not affected.

SB 170 Updates Existing Virginia Law

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