July 1, 2026 will bring significant change to Virginia’s non-compete statute and further narrow the protections employers enjoy as to agreements signed prior to that date.
Senate Bill 170 will raise expenses and litigation risk for employers who wish to enforce non-competes entered into after July 1, 2026, requiring them to disclose a monetary payment (typically, severance) “upon execution” of a non-compete or terminate employees subject to non-competes for “cause.” The amendment does not define what might constitute “cause,” does not specify when or how “cause” should be asserted by the employer, does not quantify any minimum severance or monetary payment, and does not appear to require the disclosure of the severance benefit prior to the execution of the noncompete, as “upon execution” means when the contract is signed—not before. As this amendment will not apply to non-compete provisions entered into prior to July 1, 2026, employers who wish to avoid these ambiguities and associated potential expense may consider completing non-compete updates prior to that date.
Senate Bill 128 will eliminate non-competes and clarify non-solicitation provisions for “Health Care Professionals” entered into after July 1, 2026. “Health Care Professional” is defined broadly as “any person licensed, registered, or certified by the Board of Medicine, Nursing, Counseling, Optometry, Psychology, or Social Work.” While SB 128 significantly limits health care employers’ ability to restrict competition, it also provides a carve-out for certain sale-of-business non-competes and codifies other employer strategies; namely, requiring Health Care Professionals to repay recruitment costs when employed for fewer than five years and to abide by non-solicitation covenants. Gov. Abigail D. Spanberger recommended (and the House and the Senate adopted) an amendment that will permit departing Health Care Professionals to disclose their new contact information to patients, thereby narrowing the scope of permissible non-solicits and clarifying that—at least in this context—the simple provision of contact information would not constitute impermissible “solicitation.” As these amendments will not apply to non-compete provisions entered into or renewed prior to July 1, 2026, employers of “Health Care Professionals” may wish to consider their current employment agreements and weigh the benefits and risks of revising those agreements prior to that date.
Employers must also be mindful of legislation prohibiting employers from entering into non-compete agreements with “low-wage” employees, defined as those earning below $78,364.52 or who are classified as non-exempt. Those who wish to reconsider their restrictive covenants, whether non-competition or non-solicitation, may contact a member of Christian & Barton’s Employment Group.
This item has been provided as an informational service and does not constitute legal counsel or advice, which can only be rendered in the context of specific factual situations. If a legal issue should arise, please contact an attorney listed or retain the assistance of other competent legal counsel. Case results depend on a variety of factors unique to each case and results do not guarantee or predict a similar result in any future case undertaken.