Virginia Employment Contract Review
Virginia has tightened its non-compete statute three times in six years. Va. Code 40.1-28.7:8 first banned them for low-wage employees in 2020, then in July 2025 extended the ban to every non-exempt employee regardless of pay. A 2026 amendment adds a severance requirement for employees let go without cause. For exempt staff, the average weekly wage test still decides who is protected.
Non-compete in Virginia
Limited, enforceable only in narrow cases
Are non-competes enforceable in Virginia?
Here is Virginia non-compete law in plain English, with the statute it rests on.
Banned for FLSA non-exempt (overtime-eligible) employees since July 1, 2025, except those paid mainly through sales commissions, incentives or bonuses, and for exempt employees earning below the state average weekly wage, about $78,365 a year in 2026. For agreements made from July 1, 2026, it is unenforceable against an employee fired without cause unless severance disclosed at signing is paid, and new agreements with health care professionals are banned.
Governing law: Virginia Code §40.1-28.7:8.
Whatever the label in your contract, Virginia courts look at whether the restriction is reasonable in duration, geography, and scope. A nationwide, multi-year, whole-industry ban is far more likely to be narrowed or struck down than a narrow one.
Who owns what you invent in Virginia?
Virginia does not have a specific personal-invention carve-out statute, so a broad IP-assignment clause can reach more of what you create, potentially including side projects. Read the assignment scope and push to limit it to work actually related to your job.
Arbitration and class-action waivers in Virginia
Virginia generally follows the federal rule that arbitration agreements are enforceable. Before you sign, check whether the clause is mutual and whether it waives your right to a class or collective action, you are usually giving up the right to sue in court.
Who can a Virginia employer still bind with a non-compete?
Since July 1, 2025, Virginia bars non-competes with any employee who is entitled to overtime under the FLSA. For exempt employees, the ban applies to those earning less than the Commonwealth's average weekly wage, which is $1,507.01 a week for 2026, about $78,365 a year. Employees paid mostly by commissions or incentives can still be bound.
Employers who violate the statute face a civil penalty of $10,000 per violation, and must post a summary of the law. An employee can also sue an employer that tries to enforce a banned non-compete and recover lost compensation, damages, liquidated damages and attorney's fees. The low-wage rule also protects employees from restrictions on serving customers they did not solicit.
What did Virginia change in 2026?
Senate Bill 170, signed April 13, 2026 and effective July 1, 2026, makes a non-compete enforceable against an employee terminated without cause only if the employer provides severance or other monetary payment disclosed when the agreement is signed. It applies to agreements entered into on or after July 1, 2026, and does not change earlier ones.
When you leave a Virginia job, final wages are due on the next regular payday under Va. Code 40.1-29, and a 2020 law allows employees to sue for unpaid wages, with treble damages for knowing violations.
Virginia sources checked 2026-10-09: Virginia DOLI, Notice of the Average Weekly Wage for 2026 · Greenberg Traurig, Virginia expands definition of low-wage employees and noncompetes · PilieroMazza, Virginia mandates severance for enforceable noncompetes against laid-off employees. Laws change; confirm the current rule before relying on it.
What ClauseAudit checks in a Virginia employment contract
- Non-compete enforceability under Virginia law and whether the scope is reasonable
- IP / invention-assignment scope and any personal-time carve-out
- Mandatory arbitration and class-action waiver
- At-will terms and asymmetric notice or severance
- Equity vesting, cliffs, and bad-leaver forfeiture
- Discretionary bonus criteria and clawback provisions
Virginia employment contract FAQ
Are non-competes enforceable in Virginia?
In Virginia, non-competes are enforceable only in limited circumstances under Virginia Code §40.1-28.7:8. Banned for FLSA non-exempt (overtime-eligible) employees since July 1, 2025, except those paid mainly through sales commissions, incentives or bonuses, and for exempt employees earning below the state average weekly wage, about $78,365 a year in 2026. For agreements made from July 1, 2026, it is unenforceable against an employee fired without cause unless severance disclosed at signing is paid, and new agreements with health care professionals are banned.
Can my Virginia employer own inventions I make on my own time?
Virginia does not have a specific statute carving out personal-time inventions, so a broad IP-assignment clause can reach more of what you create. Read the assignment scope carefully and ask to limit it to work related to your job.
Do I have to sign a mandatory arbitration agreement in Virginia?
Virginia generally follows the federal rule that arbitration agreements are enforceable. Check whether the clause is mutual and whether it waives your right to a class action, and know that you are usually giving up the right to sue in court. Everywhere in the US, the federal Ending Forced Arbitration Act lets you take sexual harassment and sexual assault claims to court even if you signed one.
What makes a non-compete reasonable in Virginia?
Virginia does not set a presumptive maximum term, so reasonableness is assessed on the whole restriction rather than against a number: how long it runs, how much geography it covers, how broadly it defines the restricted activity, and whether it protects something the employer can genuinely claim an interest in. A restriction that is narrow on one of those and broad on the rest is still vulnerable.
What if I work in Virginia but my employer is in another state?
It matters, because Virginia's neighbours do not all treat non-competes the same way: Kentucky (generally enforceable), North Carolina (generally enforceable), West Virginia (generally enforceable). Which state's law applies turns on the governing-law and venue clauses in your contract and on where the work is actually performed, so those two clauses are worth reading closely before you sign.
If a Virginia non-compete is too broad, does it get narrowed or thrown out?
An overbroad restriction is struck down in full, not narrowed. That works in your favour: an employer who overreaches risks losing the restriction altogether rather than having it trimmed, which is real leverage when you ask for it to be narrowed.
Is there anything specific to Virginia worth knowing?
Since 1 July 2025 the ban covers FLSA non-exempt employees, except those paid mainly through sales commissions, incentives or bonuses. For agreements from 1 July 2026, a non-compete is unenforceable against an employee fired without cause unless disclosed severance is paid.
What else should I check in a Virginia employment contract?
Beyond the non-compete: how invention assignment is worded and whether it reaches work done on your own time; whether disputes go to arbitration and whether class actions are waived; whether notice periods are symmetrical between you and the employer; and how any equity vests, including what happens if you leave before a cliff.
I am a non-exempt employee in Virginia earning $90,000. Can I be bound by a non-compete?
Not under a new agreement. Since July 1, 2025, Virginia's statute bars non-competes with any FLSA non-exempt employee, whatever their pay. The salary test only matters for exempt employees. Agreements signed before July 1, 2025 are governed by the earlier version of the law, under which your pay would have been above the low-wage line.
Does Virginia require severance if I am laid off under a non-compete?
For agreements entered into on or after July 1, 2026, yes, in effect. SB 170 makes a non-compete enforceable against an employee terminated without cause only if the employer provides severance or another monetary payment, disclosed at signing. If you are fired for cause, the requirement does not apply.
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Virginia: the governing law
- Statute
Va. Code § 40.1-28.7:8- If the clause is too broad
- An overbroad restriction is struck down in full, not narrowed.
- Worth knowing
- Since 1 July 2025 the ban covers FLSA non-exempt employees, except those paid mainly through sales commissions, incentives or bonuses. For agreements from 1 July 2026, a non-compete is unenforceable against an employee fired without cause unless disclosed severance is paid.
Statute and reformation approach from Beck Reed Riden LLP, Employee Noncompetes: A State-by-State Survey, 2026-01-21. Verify against the current text before relying on it.
How Virginia compares with neighbouring states
Virginia does not treat non-competes the same way as every state it borders, which matters when a contract names another state's law. 3 of its 6 neighbours take a different approach.
Nationally: 4 jurisdictions treat employee non-competes as void, 13 allow them only in limited circumstances, and 34 generally enforce them if reasonable.
State law summarized as of 2026-10-09; statutes change frequently. This is Automated educational information, not legal advice. Always consult a qualified Virginia attorney before signing.