Employers will soon be obligated to provide employees with severance benefits if they want to have an enforceable noncompete in Virginia and they also will be prohibited from entering into noncompetes with health care professionals, except in connection with the sale of a business. These obligations and several other new restrictions are part of Senate Bill 170 and House Bill 627, landmark legislation recently passed by the General Assembly and slated to take effect on July 1, 2026.
Changes to Virginia’s Noncompete Statute
Effective July 1, new legislation will take effect in Virginia imposing further restrictions on the use of covenants not to compete and prohibiting their use for employees who are eligible to receive overtime pay under the Fair Labor Standards Act (FLSA), i.e., non-exempt employees.