- within Compliance and Consumer Protection topic(s)
On March 5, 2026, we previously advised that Virginia’s Senate Bill 170 introduces new limitations on the enforceability of restrictive covenants by protecting employees who are terminated without cause. Effective April 13, 2026, that bill became law.
What Virginia Employers Need to Know
Non-competes entered into after July 1, 2026, will become unenforceable if the employer terminates the employee’s employment without cause and does not provide severance benefits or other monetary payments to the employee.
Non-competes include both traditional prohibitions on competition and, pursuant to recent case law, employee non-solicit covenants.
The severance benefits or other monetary payments must be disclosed at the time the non-compete agreement is entered into.
The new law will become effective July 1, 2026 and only applies prospectively.
Violations of Virginia’s law may result in liability to employers. First, employees will be authorized to bring a civil action against any employer who attempts to enforce a non-compete in violation of the law. Any successful employee will be entitled to recover reasonable costs, fees for expert witness, and attorneys’ fees. Second, employers who violate the statute face civil penalties of $10,000 per violation, paid into the Commonwealth’s general fund.
What Virginia Employers Need to Do
Any employer who may hire employees in Virginia post-July 1, 2026, and desires to use a non-compete agreement, needs to update their restrictive covenant agreements to provide for “severance benefits or other monetary payments to the employee.”
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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