Virginia’s 2026 legislative session produced significant employment law reforms that expand worker rights and protections, including new wage and hour requirements, restrictions on non-compete agreements, anti-discrimination protections, and limitations on arbitration agreements. Key provisions of new laws set to take effect on July 1, 2026, are summarized below.
SB 170 further expands Virginia’s restrictions on non-compete agreements by imposing a new enforceability condition tied to the circumstances of an employee’s separation from employment. The law provides that a covenant not to compete is unenforceable if the employer terminates the employee without cause and does not provide severance or other monetary payment, thereby effectively requiring employers to pair restrictive covenants with post-employment compensation in no-cause termination scenarios. The statute also requires that any such severance or payment be disclosed at the time the covenant not to compete is executed.
Notably, the statute does not define “cause,” nor does it specify the amount or sufficiency of the required “severance benefits or other monetary payment,” leaving open questions as to what constitutes a termination for cause and what level of consideration will be deemed adequate. The law also does not address whether such consideration may be made contingent on the employee’s execution of a release of claims or other post-employment conditions,...
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