Charles JacksonYou've been offered a new job — or you're leaving your current one. The employment contract includes a non-compete clause. Does it actually bind you?
In Virginia, the answer depends almost entirely on one number: your compensation. Since July 1, 2020, Virginia has prohibited non-compete agreements for lower-wage workers. For higher-earning employees, non-competes remain enforceable — but only if they pass a strict reasonableness test that Virginia courts apply without mercy to overbroad restrictions. Employers who get it wrong face voided contracts and $10,000 penalties.
This article compares how Virginia's non-compete law works for these two distinct groups — and what both employees and employers need to know in 2026.
Two Tiers: Virginia Non-Compete Rules at a Glance
| Low-Wage Employees (below threshold) | Higher-Wage Employees (above threshold) | |
|---|---|---|
| Non-compete permitted? | No — void and unenforceable | Yes — if reasonable |
| 2026 wage threshold | Below ~$62,691/year ($1,205.60/week) | Above ~$62,691/year |
| Governing law | Va. Code §40.1-28.7:8 (2020) | Virginia common law (3-prong test) |
| Employer penalty for violation | Up to $10,000 civil penalty per violation | N/A — non-compete may simply be voided |
| Employee remedy | Sue to void; recover attorney's fees | Challenge on reasonableness grounds |
| Non-solicitation clauses affected? | No — ban is specific to non-competes | No — non-solicitation remains enforceable |
| Sale-of-business exception? | Yes — excluded from the ban | N/A |
| FTC nationwide ban (2024)? | Struck down; does not apply | Struck down; does not apply |
The wage threshold is reset annually by the Virginia Employment Commission (VEC) based on average weekly wages across the Commonwealth. The 2026 figure of approximately $62,691/year ($1,205.60/week) reflects wages published by the VEC in late 2025. Workers earning at or below this figure are categorically protected — there is no "special circumstances" exception for the employer.
Note on the FTC's 2024 rule: In August 2024, a federal district court in Texas struck down the Federal Trade Commission's proposed nationwide ban on non-compete agreements. The ruling voided the FTC rule before it took effect, leaving state law as the operative framework. Virginia's 2020 law remains in force.
Low-Wage Workers: The 2020 Non-Compete Ban
Va. Code §40.1-28.7:8 is explicit: an employer "shall not enter into, enforce, or threaten to enforce" a non-compete agreement with any employee who is "a low-wage employee." Any such agreement signed after July 1, 2020 is void from inception — the employee has no legal obligation to honor it.
Who Is a "Low-Wage Employee"?
The statute defines a low-wage employee as someone whose average weekly earnings are less than the Commonwealth's average weekly wage, as calculated by the VEC. The threshold applies to average weekly earnings — not base salary alone. It includes hourly wages, salary, tips, and other regular compensation. Workers who earn slightly above minimum wage but receive commissions, tips, or bonuses that lift their weekly average above the threshold are not covered by the ban.
Workers whose wages fluctuate — such as seasonal employees, gig workers classified as employees, or commission-only sales staff — may need to calculate their weekly average over a representative period.
What Employers Cannot Do
The law prohibits three distinct acts:
- Entering into a new non-compete with a low-wage employee
- Attempting to enforce an existing non-compete against a low-wage employee
- Threatening to enforce such an agreement — even if the employer never actually files suit
That last point is significant. An employer who sends a cease-and-desist letter to a former low-wage employee citing a non-compete agreement is potentially liable for a $10,000 civil penalty, even if the letter is bluster. Employees who receive such threats should document them carefully.
Penalties
An employer who violates the low-wage non-compete ban may be assessed a civil penalty of up to $10,000 per violation by the Virginia Attorney General's office. The employee may also bring a private civil action to have the agreement declared void and recover attorney's fees.
Scenario: A customer service representative at a Tysons Corner tech company earns $22/hour ($44,000/year). Her employer includes a standard 12-month, statewide non-compete in her employment contract. Under Va. Code §40.1-28.7:8, this agreement is void as written — her annual earnings fall well below the $62,691 threshold. If the company attempts to prevent her from taking a job at a competitor by threatening legal action, it risks a $10,000 civil penalty.
Higher-Wage Workers: The Common Law Reasonableness Test
For employees earning above the VEC threshold, non-compete agreements are enforceable in Virginia — but subject to strict judicial scrutiny. Virginia courts apply a three-prong reasonableness test that the employer bears the burden of proving:
- Scope: The restraint must be no greater than necessary to protect the employer's legitimate business interest (trade secrets, client relationships, specialized training provided by the employer)
- Employee harm: The restraint must not be unduly harsh or oppressive in curtailing the employee's ability to earn a livelihood
- Public policy: The restraint must not conflict with sound public policy
Virginia courts are notably reluctant to "blue pencil" — or judicially revise — an overly broad non-compete. If the agreement fails on any prong, the entire restriction is typically voided rather than narrowed. This means a poorly drafted non-compete is worse than no agreement at all: the employer retains no protection and may have tipped off departing employees that they cannot be legally constrained.
What "Reasonable" Looks Like in Virginia
Virginia courts have developed a body of case law on what passes the test:
- Duration: 1-2 years is generally reasonable for most professional roles; 3+ years faces significant skepticism; anything over 5 years is highly unlikely to survive
- Geography: Must correspond to the employer's actual competitive market — a statewide restriction is acceptable for a Virginia-focused business; a nationwide restriction for a local company faces challenges
- Activity restriction: Must be limited to activities the employee actually performed or had access to confidential information about — a broad restriction on "any competitive activity in the same industry" typically fails; a narrower restriction on serving the employer's identified clients is more likely to survive
Non-Solicitation and Confidentiality: Not Affected by the Ban
The 2020 ban applies only to non-compete agreements — it does not restrict non-solicitation clauses (prohibiting an employee from poaching clients or co-workers) or confidentiality/NDA provisions. These remain fully enforceable for both low-wage and high-wage workers if they meet applicable common law standards.
À retenir: Virginia workers earning below ~$62,691/year cannot be bound by non-compete agreements — period. Workers above that threshold face enforceable but judicially scrutinized restrictions. Virginia courts void non-competes entirely rather than modify them, so overbroad drafting backfires on employers. Non-solicitation agreements are not affected by the 2020 ban.
For the broader Virginia employment law context, see the Virginia Labor Law Dossier — which covers overtime, minimum wage, sick leave, and final paycheck rules alongside non-compete restrictions.
Legal disclaimer: This article provides general educational information about Virginia non-compete law. Non-compete enforceability is highly fact-specific — the specific language of the agreement, the employee's role, and the employer's legitimate business interests all matter. Consult a licensed Virginia employment attorney before signing or acting on any non-compete agreement.
Practical Guidance: What to Do If You've Signed a Non-Compete
If you're a low-wage employee (below the threshold):
- Any non-compete you signed after July 1, 2020 is void under Virginia law — you have no obligation to honor it
- If your employer threatens you with the agreement, send a written response citing Va. Code §40.1-28.7:8 and document the threat
- You are not required to disclose to a new employer that you signed a void non-compete
If you're a higher-wage employee:
- Review the specific language carefully — does it describe geographic scope, duration, and restricted activities?
- A vague or overbroad restriction ("any competitive activity in the software industry" nationwide, indefinitely) is unlikely to be enforced
- Consult a Virginia employment attorney before signing — negotiating the scope of a non-compete before accepting a job offer is common and generally accepted
If you're an employer:
- Audit your non-compete templates: any agreement used with employees below the wage threshold after July 1, 2020 exposes you to civil penalties
- Draft restrictions with specificity: identify the exact clients, territories, and activities you are protecting
- Remember that Virginia courts will not rewrite your agreement — an overbroad non-compete provides zero protection and creates legal liability
