The Virginia Legislature enacted amendments to its existing Non-Compete Act (the “Act”) on March 24. The amendments will broaden the categories of employees who cannot be subject to non-competition covenants by including any employee who is entitled to overtime compensation, regardless of average weekly earnings. Virginia’s existing Act includes a ban on non-competes for low wage workers, while the amendments seek to clarify and expand the defined group of low wage workers. The amended Act is slated to become effective on July 1, 2025 and will only apply to agreements entered into on or after that date.
The recent amendments also serve as a reminder for Virginia employers regarding the statutory requirement to display a copy of the Virginia’s Non-Compete Act in the workplace. Failure to post a copy of the Act can result in civil penalties under Virginia law. Employers should update their workplace notices to include the amended Act by July 1, 2025.
Virginia joins several other states, including New York and Wyoming, which are proposing or have recently enacted new laws restricting non-compete covenants. On the federal level, in 2024, a federal court enjoined and set aside the FTC’s Rule banning non-competes. On March 7, 2025, the FTC filed for a 120-day stay of its appeals in the Fifth and Eleventh Circuits while it considers how to proceed under the new administration.
Employers should remain cognizant of ongoing state and federal legislative efforts to prohibit or restrict non-compete agreements and consult with counsel to ensure compliance.
