Quick Answer
Guide to Virginia non-compete law including 2020 ban on low-wage worker non-competes and enforceability standards.
Quick Answer: Virginia significantly restricted non-competes in 2020, banning them for low-wage workers (below median hourly wage). For other workers, non-competes must be reasonable in scope, duration, and geography to be enforceable.
Virginia limits non-competes for low-wage workers.
Virginia Non-Compete Law
2020 Reform
Key changes:
- Banned non-competes for low-wage workers
- Effective July 1, 2020
- Threshold: median hourly wage
- Strong penalties for violations
Low-Wage Worker Ban
Cannot enforce against:
- Workers earning less than median hourly wage
- Or $15.52/hour if median is lower
- Or interns, students, apprentices
- Regardless of exempt status
Other Workers
Still enforceable if:
- Above wage threshold
- Reasonable terms
- Legitimate business interest
Who's Exempt from Non-Competes
Low-Wage Workers
Definition:
- Below Virginia median hourly wage
- Currently approximately $21/hour
- Or below $15.52/hour
- Whichever is greater
Specific Categories
Also banned:
- Interns (paid or unpaid)
- Students
- Apprentices
- Independent contractors below threshold
What Still Applies
Even for low-wage workers:
- Confidentiality agreements
- Non-disclosure agreements
- Invention assignment
- Non-solicitation (potentially)
Enforceability for Higher Earners
Reasonableness Test
Must be:
- Reasonable in duration
- Reasonable in geography
- Reasonable in scope
- Protecting legitimate interest
Legitimate Interests
Protectable:
- Trade secrets
- Confidential information
- Customer relationships
- Goodwill
What's Reasonable
Generally:
- 1-2 years duration
- Geographic area where worked
- Limited to actual competition
Penalties for Violations
Low-Wage Non-Compete Violations
Employer faces:
- Civil penalty up to $10,000 per violation
- Payment of attorney's fees
- No enforcement of agreement
Employee Remedies
May recover:
- Injunctive relief
- Liquidated damages
- Attorney's fees and costs
Non-Solicitation Agreements
Different from Non-Competes
Non-solicitation:
- May still be enforceable
- Even for low-wage workers
- Must be reasonable
Enforceability
Upheld if:
- Limited to customers worked with
- Reasonable time period
- Protects legitimate interest
Confidentiality Agreements
Always Enforceable
Not affected:
- NDA provisions
- Confidentiality obligations
- Trade secret protection
Distinct from Non-Compete
Key difference:
- Protects information
- Doesn't prevent employment
- More readily enforced
Common Scenarios
Scenario 1: Hourly Restaurant Worker
Situation: Server signed non-compete, earning $12/hour.
Analysis: Unenforceable. Below threshold. Employer cannot enforce.
Scenario 2: Sales Professional
Situation: Sales rep earning $80k with 2-year statewide restriction.
Analysis: Above threshold. Evaluate reasonableness of terms.
Scenario 3: Recent Graduate
Situation: Entry-level position, $18/hour, with non-compete.
Analysis: Near threshold. Calculate against median wage. May be unenforceable.
Scenario 4: Senior Executive
Situation: VP with 1-year competitor restriction.
Analysis: Likely enforceable if reasonable scope and geography.
Before Signing
Evaluate Threshold
Calculate:
- Your hourly rate
- Compare to median wage
- Determine if ban applies
Negotiate Terms
Try to:
- Limit duration
- Narrow geography
- Restrict scope
- Add exceptions
Legal Review
Consider:
- Attorney review
- Understand rights
- Know enforceability
Challenging Non-Competes
If Below Threshold
Steps:
- Calculate hourly rate
- Document earnings
- Notify employer of ban
- May file complaint
If Above Threshold
Challenge if:
- Terms unreasonable
- No legitimate interest
- Overly broad
Frequently Asked Questions
Does Virginia ban all non-competes?
No. Only for low-wage workers (below median hourly wage). Others still potentially enforceable if reasonable.
What is the wage threshold?
Virginia median hourly wage, or $15.52/hour, whichever is greater.
Can I be forced to sign a non-compete?
Depends on earnings level. If below threshold, agreement is void.
What are penalties for employers?
Up to $10,000 per violation plus attorney's fees.
Related Topics
Take Action
If facing non-compete issues:
- Calculate hourly rate
- Compare to threshold
- Review agreement terms
- Consult employment attorney
- Know your rights
Legal Disclaimer
This article provides general information about Virginia non-compete law and is not legal advice. For specific advice, consult a licensed Virginia employment attorney.
For official information:
- VA DOLI: https://www.doli.virginia.gov/