Virginia Restricts Non-Competes

SB 170 will void employee non-competes for workers who are laid off without severance or other compensation. According to the bill, this will apply to all involuntary terminations, except in “for-cause” terminations. These restrictions would apply to all non-compete agreements signed on or after July 1, 2026. 

Many employers incorporate non-compete agreements into their new hire process for certain employees, but they may not provide severance if the employee is terminated. Under the new law, non-competes that were entered into pre-hire or during employment will not be enforceable against the terminated employee unless they receive severance or other compensation.

The bill, which passed both the state Senate and the House of Representatives, is now headed to Governor Abigail Spanberger and expected to be signed into law.

Fisher & Phillips LLP:
Virginia Takes Another Step to Restrict Non-Competes: A 5-Step Action Plan for Employers