Virginia employers should review and update their non‑compete agreements now. On March 4, 2026, the Virginia General Assembly approved Senate Bill No. 170 (the Bill), which would significantly limit the enforceability of non‑compete agreements by conditioning enforcement on the payment of severance in certain circumstances. The Bill now heads to Governor Spanberger's desk and is expected to be signed into law.
If enacted, the legislation will further narrow when and against whom Virginia employers may enforce post‑employment restrictive covenants, increasing litigation risk and compliance complexity.
The Bill amends Virginia's non‑compete statute, Virginia Code § 40.1‑28.7:8, to provide that a non‑compete agreement is unenforceable against any employee who is discharged without cause and does not receive severance benefits or other monetary payments.
To preserve enforceability, the Bill requires that any severance or other monetary payments be disclosed at the time the non‑compete agreement is executed.
Notably, the Bill:
These omissions create uncertainty for employers and increase the likelihood of disputes over enforceability.
Virginia already imposes...
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