Virginia Further Restricts Non-Compete Agreements for Discharged Employees

Who: Virginia employers

When: Effective July 1, 2026

Virginia Governor Abigail Spanberger signed Senate Bill 170 on April 13, 2026, amending Virginia’s non-compete statute to further limit the enforceability of restrictive covenants. The law takes effect July 1, 2026, and applies to any non-compete agreement entered into, renewed, or amended on or after that date. Agreements executed before July 1, 2026, are not affected.

Under the new law, a non-compete agreement is unenforceable if an employer discharges an employee without cause and does not provide severance pay or other monetary payment. The law requires that employers disclose any severance benefits or other monetary payments that will support the enforceability of the non-compete to the employee at the time the agreement is executed, not at the time of separation. The statute does not define what constitutes “for cause” termination, nor does it specify a minimum amount of severance or other monetary payment. Both questions will be subject to judicial interpretation over time.

SB 170 applies to all employees in Virginia, not just low-wage employees. This is a meaningful expansion. Virginia already prohibits non-compete agreements for “low-wage” employees, defined as those whose average weekly earnings are less than the state’s average weekly wage (currently $1,507.01 per week, or $78,364.52 per year) or who are classified as non-exempt under the FLSA. Non-Solicitation Provisions Also Implicated

A Court of Appeals of Virginia’s January 2026 ruling in Sentry Force Security, LLC v. Barrera held that a customer non-solicitation clause restricting direct solicitation does not fall within the statutory definition of a non-compete, but a clause that prohibits accepting unsolicited business from customers—as well as employee non-solicitation agreements—does fall within the statutory restrictions. The distinction between soliciting customers and accepting their unsolicited business is therefore consequential when drafting these agreements. Nondisclosure agreements protecting trade secrets or confidential information are not affected.

Enforcement and Remedies

Any employee may bring a civil action against an employer that attempts to enforce an unlawful non-compete. Such actions must be filed within two years of the later of the date the covenant was signed, the date the employee learned of the covenant, the date employment ended, or the date of the enforcement attempt. Courts may void unlawful covenants and award injunctive relief, liquidated damages, lost compensation, and attorneys’ fees and costs. Employers are further prohibited from retaliating against employees who bring such actions.

Employers who violate the prohibition on non-competes for low-wage employees or who attempt to enforce a non-compete against a discharged employee without severance may face civil penalties of $10,000 per violation.

SB 170 also requires employers to post a copy of the law or a summary approved by the Virginia Department of Labor and Industry in the same location where other required employee notices are displayed. Failure to comply with this posting requirement may result in civil penalties of up to $1,000.

How:

• Audit all offer letters, restrictive covenant agreements, and employment agreements that include non-solicitation and non-competes clauses or other appropriate language to ensure they comply with the law.
• Revise your standard non-compete agreement templates to include disclosure of any severance benefits or other monetary payments provided upon separation at the time of signing, ensuring the agreement’s enforceability.
• Clearly define “for cause” termination clearly in your non-compete agreements, since the statute does not define the term and courts will have discretion in interpreting it. Work with employment counsel to develop language that accurately reflects your organization’s termination practices.
• Post the required copy of Virginia’s non-compete law or an approved summary in your workplace alongside other mandatory employee notices.
• Train HR personnel and hiring managers stay informed about the new legal requirements and update policies and templates as needed.
• Consult employment counsel before renewing or amending any existing non-compete agreement.

Additional Resources:

SB 170

Sentry Force Security, LLC v. Barrera

Virginia Enacts Pay Transparency Law and Salary History Ban

Who: Viriginia employers

When: Effective July 1, 2026

Virginia Governor Abigail Spanberger signed HB 636 and SB 215—companion bills—on April 22, 2026, enacting new pay transparency requirements and a salary history ban. The law takes effect July 1, 2026, and applies to all employers in Virginia without a minimum employee threshold. Virginia is the first Southern state to enact this type of law.

The law requires employers to include compensation information in all job postings and prohibits employers from seeking or relying on an applicant’s wage or salary history when making hiring or compensation decisions. It also creates a private right of action, which makes Virginia one of only two states to provide employees and applicants with the ability to sue directly for job-posting violations.

Salary History Ban

Virginia employers may not seek a prospective employee’s wage or salary history from the applicant or from prior employers. Employers also may not rely on that history when deciding whether to extend an offer or when setting starting pay. The prohibition covers all forms of pay inquiry, formal and informal, including an interviewer’s casual question about current compensation.

There is one limited exception: If an applicant voluntarily discloses their wage or salary history without any prompting from the employer, the employer may use that information solely to confirm the disclosed history or to support offering a higher wage provided that doing so does not violate state or federal equal pay laws. The employer may not use voluntarily disclosed history to justify a lower offer.

Pay Range Disclosure Requirements

Every public and internal job posting for any position—including promotions, transfers, and other employment opportunities—must include the wage, salary, or wage or salary range for the role. A “wage or salary range” is defined as the minimum and maximum compensation for the position, set in good faith by reference to a pay scale, a previously determined range, the actual range paid to employees currently in equivalent positions, or the budgeted amount. Good faith is assessed in part by considering whether the range is unreasonably broad.

The disclosure requirement covers all job postings, including those for internal opportunities. General language such as “competitive compensation” does not satisfy the requirement.

Anti-Retaliation Protections

Employers may not fire, discipline, fail to hire, fail to promote, or otherwise penalize any applicant or current employee for requesting a wage range, declining to disclose salary history, or otherwise exercising their rights under the law.

Enforcement and Liability

The law creates a two-track enforcement model. The Virginia Attorney General may bring a civil action and seek civil penalties of up to $1,000 for a first violation and up to $5,000 for subsequent violations. Separately, any aggrieved prospective employee or employee may file a private civil action within one year of the alleged violation to recover actual damages and other legal or equitable relief.

For violations related to job posting failures, a 15-business-day cure period applies. If an employer corrects the posting within 15 business days of receiving written notice, no civil action may be brought for that specific posting violation. A single notice for any given posting is sufficient for the duration of that posting. The cure period does not apply to salary history inquiries or retaliation claims.

How:

• Audit all job applications and interview protocols to identify and remove any questions about an applicant’s prior or current compensation.
• Establish defined, good-faith pay ranges for every position in your organization. Maintain documentation supporting the basis for each range (pay scale, market data, internal benchmarks, or budgeted amount).
• Update all public and internal job postings to include the required wage or salary range
• Update employee handbooks and HR policies to reflect the salary history ban and the anti-retaliation protections.
• Train all hiring personnel on the new requirements of the law

Additional Resources:

SB 215

HB 636