Quick Answer
Guide to Virginia employment contracts including non-compete restrictions, NDAs, severance agreements, and the 2020 non-compete law.
Quick Answer: Virginia passed a 2020 law restricting non-competes for low-wage workers (earning less than average weekly wage, approximately $60,000/year). Non-competes are unenforceable against these workers. For higher earners, Virginia courts enforce reasonable restrictions. Virginia is an at-will state but contracts can modify this.
Understanding Virginia's unique non-compete restrictions protects your rights.
Virginia Employment Contract Overview
At-Will Default
General rule:
- Employment is at-will
- Either party can end anytime
- Contracts can modify at-will
2020 Non-Compete Law
Va. Code § 40.1-28.7:8:
- Restricts non-competes for low-wage workers
- Cannot enforce against those earning below threshold
- Significant employee protection
Types of Employment Agreements
Employment Contracts
May include:
- Duration of employment
- Compensation terms
- Job duties
- Termination provisions
- Restrictive covenants
Non-Compete Agreements
Restrict:
- Working for competitors
- Within certain geography
- For specified time period
- Subject to Virginia restrictions
Non-Disclosure Agreements (NDAs)
Protect:
- Trade secrets
- Confidential information
- May be indefinite
Non-Solicitation Agreements
Restrict:
- Soliciting customers
- Recruiting employees
- Generally more enforceable
Severance Agreements
Provide:
- Payment upon termination
- In exchange for releasing claims
- May include restrictions
Virginia Non-Compete Law
2020 Restrictions
Va. Code § 40.1-28.7:8:
- Protects "low-wage employees"
- Non-competes unenforceable against them
- Significant reform
Who's a Low-Wage Employee?
Definition:
- Earns less than average weekly wage
- Approximately $60,000/year (check current)
- Includes many workers
What's Prohibited
For low-wage workers:
- Non-compete covenants void
- Cannot enforce restrictions
- Applies to new and existing agreements
Higher-Wage Employees
Traditional rules:
- Reasonable restrictions enforceable
- Must protect legitimate interests
- Courts analyze reasonableness
Non-Compete Enforceability (Higher Earners)
Virginia Standard
Courts consider:
- Reasonable geographic scope
- Reasonable duration
- Reasonable activity restriction
- Protects legitimate business interest
- Not unduly harsh
What's Reasonable
Generally:
- Duration: 1-2 years typically
- Geography: Area of business operations
- Activity: Limited to actual competition
Blue Pencil/Modification
Virginia courts:
- May modify overly broad terms
- Not strictly required to enforce as-is
- Case-by-case analysis
Non-Solicitation Agreements
Customer Non-Solicitation
May restrict:
- Contacting customers you served
- Within reasonable scope
- Often more enforceable than non-competes
Employee Non-Solicitation
May restrict:
- Recruiting former coworkers
- Generally enforceable
- Must be reasonable
Severance Agreements
What They Include
Common terms:
- Severance payment
- Release of claims
- Non-disparagement
- Confidentiality
- May include non-compete
OWBPA (40+ Workers)
Requirements:
- 21 days to consider
- 7 days to revoke
- Advise attorney consultation
Common Scenarios
Scenario 1: Low-Wage Worker with Non-Compete
Situation: Make $45,000/year with non-compete.
Analysis: Non-compete likely unenforceable under 2020 law.
Scenario 2: High-Earner Non-Compete
Situation: Executive with 2-year, statewide non-compete.
Analysis: Subject to traditional reasonableness analysis.
Scenario 3: Non-Solicitation of Clients
Situation: Leaving job with customer non-solicitation.
Analysis: Generally enforceable. Review specific terms.
Scenario 4: Severance Offered
Situation: Laid off, offered severance with release.
Analysis: Review what you're releasing. Consider negotiating.
Breach of Contract
If You Breach
Employer may:
- Seek injunction
- Sue for damages
- Enforce reasonable terms
If Employer Breaches
You may:
- Sue for damages
- Recover promised compensation
- Seek specific performance
Frequently Asked Questions
Are non-competes enforceable in Virginia?
For low-wage workers (below ~$60,000), no. For higher earners, if reasonable.
What is the 2020 non-compete law?
Virginia law making non-competes unenforceable against low-wage employees.
Can I negotiate my non-compete?
Yes. Many terms are negotiable.
What about non-solicitation agreements?
Generally more enforceable than non-competes.
How long can a non-compete last?
For enforceable ones, typically 1-2 years is considered reasonable.
Related Topics
- Virginia Employment Law Hub
- Virginia Non-Compete Agreements
- Virginia Severance Agreements
- Virginia Wrongful Termination
Take Action
Before signing any agreement:
- Know your wage level
- Check if 2020 law applies
- Review all terms carefully
- Consider negotiating
- Consult employment attorney
Legal Disclaimer
This article provides general information about employment contracts in Virginia and is not legal advice. For specific advice, consult a licensed Virginia employment attorney.
For official information:
- Virginia State Bar: https://www.vsb.org
- Virginia DOLI: https://www.doli.virginia.gov