2026 AMENDMENT TO VIRGINIA

RESTRICTIVE COVENANTS STATUTE

June 9, 2026

Seems like déjà vu. On June 30, 2025, our firm posted a blog about Virginia’s new law concerning covenants not to compete.  See https://restonlaw.com/new-virginia-non-compete-law/.  Virginia has now further curtailed the use of such clauses, joining a growing list of jurisdictions that have done the same, including California, Colorado, Connecticut, D.C., Illinois, Maine, Maryland, Minnesota, New Hampshire, North Dakota, Oklahoma, Oregon, Rhode Island, Washington and Wyoming. 

This Client Alert focuses on the most recent changes in Virginia. However, there also have been recent changes enacted in Maryland, D.C. and other jurisdictions. 

Effective July 1, 2026, new legislation in Virginia further restricts an employer’s ability to impose covenants not to compete on employees by (a) prohibiting their use for employees who  are not exempt under the FLSA, who are low wage workers (i.e., those making less than an indexed amount, which is currently $78,365 and presumably will increase every year), health care professionals and certain other workers, and (b) requiring contractual severance/payment obligations in connection with any restrictions that are permitted under the revised statutes. The restrictions apply to employment contracts entered into, amended or renewed, on or after July 1, 2026.

The current landscape in Virginia can be summarized as follows beginning July 1:

(1)       For Non-Exempt Employees Under the FLSA, Low-Wage Employees, Healthcare Professionals and Certain Other Workers –non-compete provisions are not permitted regardless of severance offered.

(2)       For High-Wage and Exempt Employees – a non-compete may still be enforceable, but for agreements entered into, amended, or renewed, on or after July 1, 2026, the employer must provide severance or other monetary payment disclosed at signing if the employee is discharged without cause (which is not defined in the new law). An important point to note here is that the new law does not apply to employees who resign or who are discharged for cause.

(3)       Non-solicitation of employee clauses may still be permitted as long as they are narrowly tailored to protect the legitimate business interests of the company.

(4)       Non-solicitation of customer clauses:

(a)       Broad version where clause includes restrictions on employees  providing services to customers/clients of the employer even if the employee doesn’t initiate contact with or solicit the customer or client – such clauses may still be valid but only for high-wage and exempt employees subject to the severance/payment obligations noted above.

(b)        Narrow version only restricting an employee from soliciting clients where the employee initiates contact – still permitted and don’t appear to be subject to the new requirements.

Action Items for Employers

1. Evaluate Applicability: Before imposing or amending a non-compete agreement on any employee—whether new or existing—determine whether the employee qualifies as a “low-wage employee” under Virginia law or a “non-exempt employee” under the FLSA.
2. Strengthen Confidentiality Protections: Ensure all employees are bound by robust nondisclosure agreements. These should include provisions for the return or destruction of company confidential information upon termination and clear prohibitions on the post-employment use of such information (in particular information about the company’s employees and customers).
3. Review Multi-State Employment Practices: Determine what state law should govern a Virginia employer hiring an employee operating in another state. Should the laws of another state be chosen to govern certain out-of-state employment agreements so as to add better protection for a Virginia employer?

DISCLAIMER. This Client Alert does not provide legal advice. We are providing it for general informational purposes only.  For further information, please contact the Reston Law Group, LLP