Form submitted successfully, thank you.

Error submitting form, please try again.

Are Non Compete Agreements Enforceable In Virginia

Note, however, that the law “limits its application to non-competing obligations that will be concluded on July 1, 2020.” It therefore does not apply retroactively. By 1 July 2020, employers should review their form and non-competition conditions – and other restrictive agreements – to ensure compliance with the new restrictions. Employers should publish the necessary notification of the new law before the same day. And remember that you can`t even threaten to impose a (broadly defined) non-compete clause that was concluded on Or after July 1, 2020 against a low-wage worker (i.e. someone earning about $50,000). Low-wage workers are required to file their shares within two years, when the date (1) of the competition has been signed; (2) low-wage workers are informed of competition; (3) the worker resigns or is dismissed; or (4) the employer takes all necessary measures to enforce the rules of non-competition. Under the new legislation, courts can overturn violations of non-competition prohibitions, order an injunction and award lost compensation, liquidated damages and reasonable legal fees to successful former employees. In addition, employers should expect civil penalties of up to $10,000 for any violation of the law. Senate Act 480 defines “low-wage workers” as workers whose average weekly wage over the past 52 weeks is “below the commonwealth average weekly wage,” as calculated under VA 65.2-500 (b).

According to the most recent data from the Virginia Employment Commission (“VEC”), the average weekly wage is $1,204, which would be equivalent to about $62,600 per year and could cover about half of the workforce in Virginia. However, it is important to note that the VEC recalculates each quarter. Therefore, a non-competition agreement, which would otherwise be applicable under this new law if it is registered, could not be applicable in the event of an average wage increase. Since not all NCCs are equal and not all companies are equal, there is no quick and hard rule on when NCCs are applicable. In Virginia, courts are required to review NCBs on a case-by-case basis. In doing so, they must follow several general rules. First, they must issue the NCC against the author of the clause; any ambiguity in a CNC must be read for the benefit of the employee. In addition, the employer bears the burden of proof that the NCC is appropriate.

As the law is constantly evolving, we recommend that employers have their agreements checked regularly to ensure they are applicable. In 2011, the Virginia Supreme Court ruled that a non-compete agreement was too broad, identical to an agreement it had confirmed as appropriate for the same employer in 1989.