Virginia enacted a ban on non-compete agreements for low-wage employees effective July 1, 2020. If your average weekly earnings do not exceed the average weekly wage for Virginia workers (approximately $1,290 per week in 2023), a non-compete is void. Virginia is one of the few states where employees can proactively sue employers for presenting an illegal non-compete.
What is a Enforceability?
Under Virginia Code section 40.1-28.7:8, an employer may not enter into, enforce, or threaten to enforce a non-compete with a "low-wage employee" — defined as one whose average weekly earnings are at or below the average weekly wage for Virginia as reported annually by the Virginia Employment Commission. Employees who are covered include part-time workers, interns, and independent contractors whose earnings fall below the threshold. The law applies to agreements entered on or after July 1, 2020.
Red flags to watch for
Virginia bans non-competes entirely for employees earning at or below the average weekly wage threshold. Presenting one to a covered employee is itself a violation of law.
The Virginia law prohibits not just entering into but also threatening to enforce a non-compete against a covered employee. Cease-and-desist letters or legal threats are themselves violations.
For higher earners above the low-wage threshold, Virginia courts apply a common-law reasonableness test. Overbroad geographic scope or excessive duration are the most common grounds for challenging enforceability.
Virginia courts require the employer to demonstrate a protectable interest such as customer relationships, trade secrets, or specialized training investment. Bare restraint of trade is not sufficient.
Virginia courts will generally apply Virginia law to Virginia employees. An employer selecting Delaware or Georgia law cannot circumvent Virginia protections for low-wage workers.
Your legal rights
Under Virginia Code section 40.1-28.7:8, a low-wage employee may bring a civil action against an employer who violates the ban. Remedies include: voiding the non-compete; recovering lost compensation, benefits, and other economic losses; and recovering attorney fees and costs. The employer bears the burden of proof that any non-compete complies with the law. For employees above the low-wage threshold, Virginia courts apply common-law reasonableness with no blue-penciling — unenforceable clauses are voided, not rewritten.
Questions to ask before you sign
- 1Are my average weekly earnings at or below the Virginia average weekly wage threshold?
- 2Has the employer threatened to enforce a non-compete against me after I leave?
- 3What legitimate business interest does the employer claim to be protecting?
- 4How long does the restriction last and what geographic area does it cover?
- 5Does the contract apply Virginia law, or does it attempt to select another state?
Disclaimer: This guide is for educational purposes only and does not constitute legal advice. Contract law varies by jurisdiction and individual circumstances. Always consult a qualified legal professional before making decisions based on this information.