Virginia employers face an immediate change in their ability to protect legitimate business interests—there are two new laws that effectively ban non-competition restrictions for employees terminated without cause and for health care professionals. In addition, the forthcoming results of the Virginia State Bar’s (VSB) study on confidentiality provisions in settlement agreements involving personal injuries for sexual assault could drastically affect how these cases are settled.

Ban on non-competes for terminations without cause

Previously, in 2020, Virginia established a ban on non-competition restrictions for employees who earn less than the average weekly wage of the Commonwealth, which is a fluctuating number currently at $1,507.01 per week ($78,364.52 annualized). Then, in 2025, Virginia expanded that ban to include all employees classified as non-exempt under the federal Fair Labor Standards Act.

Now, effective July 1, 2026, Virginia will prohibit non-compete restrictions where an employee is terminated without cause, unless the employer provides severance benefits or other monetary payment that was disclosed when the covenant was executed. Notably, the new law does not define “cause,” “severance benefits,” or a minimum amount, which will require careful agreement drafting and likely result in litigation interpreting those provisions. Additionally, the new law not only renders offending non-competes unenforceable but also establishes civil penalties of up to $10,000...

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