Virginia Gov. Abigail Spanberger signed Senate Bill (SB) 170 into law on April 13, 2026, after Virginia’s General Assembly passed the bill on March 4, 2026. SB 170 amends § 40.1-28.7:8 of the Code of Virginia by introducing new restrictions and requirements regarding covenants not to compete between employers and employees, with a particular focus on low-wage employees and employees who are discharged. Under the bill, a noncompete agreement will be unenforceable if an employer terminates an employee without cause and the employee does not receive severance pay or other prior disclosed monetary compensation. The bill does not define what constitutes “cause.”
SB 170 applies to all employees in Virginia who enter into noncompete agreements on and/or after July 1, 2026 (not just low-wage employees). Any employee may bring a private civil action against an employer for alleged unfair contractual practices related to the enforcement of an unlawful noncompete agreement. The bill does not limit nondisclosure agreements protecting trade secrets or proprietary/confidential information. Contracts, covenants, or agreements entered into, amended, or renewed before July 1, 2026, are not affected by SB 170. The bill does not include any express carve-outs for noncompetes entered into after sale of business.
Likewise, the bill does not address whether the definition of “covenant not to compete” includes non-solicitation provisions. Notably, however, the Court of Appeals of Virginia...
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