Virginia Extends Ban on Non-Competes

Virginia lawmakers extended the state’s ban on non-compete agreements to cover all non-exempt employees. This new law affects how employers can enter non-compete agreements with even more of their employees and goes into effect on July 1, 2025.

On March 24, 2025, Virginia Governor Glenn Youngkin signed SB 1218, amending Virginia’s non-compete ban for “low-wage” workers. The ban now includes all non-exempt employees under the Fair Labor Standards Act (FLSA), no matter of their rate of pay.

Which Employees Are Now Covered by the Non-Compete Ban?

Virginia’s ban on non-competes for low-wage workers previously defined “low-wage employees” as those who earn less than Virginia’s average weekly wage, as defined by the Virginia Employment Commission. In 2025, Virginia’s average weekly wage is $1,463.10 per week.

Now, Virginia employers cannot place any non-exempt employee under a non-compete, nor can employers place any exempt employee under a non-compete that makes less than Virginia’s average weekly wage.

Notably, the ban does not apply retroactively, meaning it will not affect any non-competes with non-exempt employees that are entered into or renewed before July 1, 2025.

What Are the Risks for Employers?

The main components of Virginia’s ban on non-compete agreements have not significantly changed. Employees can still file a civil lawsuit against employers or individuals attempting to enforce any unlawful non-compete.

Low-wage employees seeking relief must initiate an action within two years of: (i) the non-compete’s execution, (ii) the date the employee learned of the non-compete provision, (iii) the employee’s resignation or termination, or (iv) the employer’s action aiming to enforce the non-compete. Employees who prevail may be entitled to be paid liquidated damages, lost wages, benefits, and attorneys’ fees. Employers may also face civil penalties of up to $10,000 dollars.

What Does This Mean for Virginia Employers?

Virginia employers should ensure any new employees subject to non-competes are properly classified as exempt. Even non-exempt employees who make well above Virginia’s average weekly wage cannot be subject to a non-compete agreement.

Additionally, there are notice requirements associated with the state’s non-compete ban. Although Virginia does not require employers to notify individual employees about the validity of their non-compete agreements, employers must display a general notice outlining the non-compete ban for “low wage” employees. This notice must include a copy of Virginia Code § 40.1-28.7:8 or an approved summary of the code section provided by the Virginia Department of Labor and Industry and be displayed alongside other mandatory federal and state employment law postings.

What Should Employers Do Before July 1, 2025?

Employers should review all existing non-compete agreements and ensure any new employees subject to non-compete agreements are properly classified as exempt. In some cases, employers may want to consider renewing these agreements with non-compete provisions removed so other provisions can be enforced.

If you are considering renewing or entering into new non-compete agreements with an employee, you should consult an experience employment attorney. Contact the authors of this article, your Woods Rogers attorney, or a member of the Labor & Employment team for assistance.