Virginia’s 2026 Noncompete Rules: What Leaving a Job Means for You

If a noncompete is standing between you and your next job—or a former employer is threatening to sue if you take it—do not assume the leash still holds. As of July 1, 2026, Virginia narrowed when employers can use covenants not to compete under Virginia Code § 40.1-28.7:8.

Two enacted bills drive the change:

• Senate Bill 170 (Acts of Assembly 2026, Chapter 883): for many workers, a noncompete is unenforceable if the employer discharges you and does not provide severance (or other monetary payment) that was disclosed when you signed—unless the discharge was for cause.
• Senate Bill 128 (companion to HB 627): employers may not enter into, enforce, or threaten to enforce a noncompete against a covered health care professional.

Neither bill is a time machine. In general, they do not automatically void older agreements. The new rules are clearest for covenants entered into, amended, or renewed on or after July 1, 2026 (SB 170’s effective-date language includes amendments; SB 128’s focuses on agreements entered into or renewed). Bring the signed document—and its date—to any consultation.

This post continues our series on Virginia’s 2026 Employment Protections. Below is what matters if you are the one leaving.

The real takeaway for Virginia workers

Strip away the bill numbers. Here is the practical shift:

• A post-July-1 noncompete now has a price tag after a without-cause firing. If the employer did not disclose severance (or other payment) when you signed—and does not provide it when they fire you—the covenant may be unenforceable (unless they can show cause).
• “Cause” will be the battleground. The statute does not define it. Expect sudden write-ups on the way out. Your contemporaneous reviews, metrics, and emails are the antidote.
• You can often still serve customers who come to you. By definition, a “covenant not to compete” under this statute does not restrict providing a service to a customer or client if you did not initiate contact or solicit them.
• Covered health care professionals get a near-ban on new noncompetes—with narrow carve-outs for sale-of-business deals, certain recruitment-cost repayment, and limited customer nonsolicits.
• Threat letters are not the last word. Employees can sue to void unlawful enforcement, seek damages and attorney fees, and employers face up to a $10,000 civil penalty per violation. Many threats collapse when counsel points to the statute.

First: What counts as a noncompete?

Under § 40.1-28.7:8, a covenant not to compete is an agreement that restrains your ability, after employment ends, to compete with your former employer.

Two definitional points matter immediately:

• It does not block you from serving a customer or client if you did not initiate contact or solicit them.
• The statute expressly preserves legitimate nondisclosure / trade-secret agreements.

Practical takeaway: NDA ≠ noncompete ≠ nonsolicit ≠ bonus repayment. Read each stack separately—and do not treat a threat letter as an accurate summary of the law.

If you’re a health care professional: new noncompetes are largely off-limits

Under SB 128, no employer shall enter into, enforce, or threaten to enforce a covenant not to compete with a health care professional—defined as any person licensed, registered, or certified by the Boards of Medicine, Nursing, Counseling, Optometry, Psychology, or Social Work.

So if you are a nurse, physician, counselor, therapist, or similar covered professional, an employer generally cannot use a new noncompete (signed or renewed on/after July 1, 2026) to keep you from practicing elsewhere. Coverage turns on board licensure/registration/certification—not only on whether your current job title “requires” the license.

What employers can still use (narrow carve-outs)

• NDAs protecting trade secrets and confidential information
• Sale-of-business covenants when the deal sells all or substantially all of the operating assets (with goodwill) of the practice/entity (or a division/subsidiary), or the ownership interest—and the restriction is reasonable in scope, duration, and geography
• Recruitment-cost repayment (relocation, signing/retention bonuses, recruiting/education/training costs, and similar inducements) from a departing professional employed fewer than five years
• Narrow customer nonsolicits limited to customers (including actively sought prospects) with whom you had material contact, for the same or substantially similar products/services—and nonsolicit language must be narrowly construed

Even with a nonsolicit, remember the statute’s baseline rule: a noncompete does not stop you from serving a patient or client who contacts you if you did not solicit them. Do not assume a cease-and-desist means you must abandon every former patient relationship without advice.

If you’re fired: missing disclosed severance can knock out the noncompete

This is SB 170’s headline change—and it reaches beyond health care.

A noncompete between an employer and an employee is not enforceable if the employer discharges you and does not provide severance benefits or other monetary payment—unless the discharge was for cause. That severance or payment must have been disclosed upon execution of the covenant. An employer cannot invent a token payment at termination time to revive the restriction.

The statute does not define “cause,” “severance benefits,” or a minimum dollar amount. Those gaps will drive real disputes.

What this means in practice

• Fired without cause, and no disclosed severance paid? The post-July-1 noncompete may not be enforceable against you.
• Fired for cause? This particular rule may not knock out the covenant (other limits—low-wage status, health-care status, common-law reasonableness—may still help).
• You quit? The discharge/severance rule is about being discharged. Other protections may still apply.
• You still have a next offer? Do not quietly walk away from it based on a threat letter alone. Get the covenant reviewed first.

Low-wage employees: still protected

Virginia’s existing rule remains: employers cannot enter into, enforce, or threaten to enforce a noncompete against a low-wage employee.

That generally includes workers whose average weekly earnings are below Virginia’s average weekly wage (about $1,507 per week in 2026 DOLI guidance), people entitled to overtime under federal law, many interns/apprentices/trainees, and certain lower-paid independent contractors. Commission-heavy roles are often carved out.

If they try to enforce it anyway

An employee may bring a civil action in a Virginia court against a former employer (or other person) that attempts to enforce a covenant in violation of this section. SB 170 broadened that private right of action beyond the old low-wage-only framing for the discharge rule.

You generally have two years from the later of:

1. the date the covenant was signed,
2. the date you learned of it,
3. the date employment ended, or
4. the date the employer takes any step to enforce it.

A court can void the covenant, stop unlawful enforcement, and award liquidated damages, lost compensation, other damages, and reasonable attorney fees and costs (including expert fees). Employers also may not retaliate against you for bringing the claim.

Separately, the Commissioner can assess civil penalties of $10,000 per violation. Employers must post this section (or an approved summary) with other required workplace notices.

Build the file before the story gets rewritten

New statutes get tested. Employers will argue about what counts as “cause,” what payments qualify, and whether a clause is “really” a nonsolicit or NDA rather than a noncompete.

That is why we built Cloud Counsel—J. Madison PLC’s secure platform for employees to assemble a structured case file: the agreement and its date, offer letters, termination paperwork, performance reviews, threat emails, and a timeline that locks in what happened when it happened. When a late-invented “cause” narrative appears, you want contemporaneous proof already organized—not a scramble from memory.

Once the file is together, our team can evaluate enforceability under the 2026 statutes and Virginia’s longer-standing limits on unreasonable restraints of trade—and tell you, plainly, whether the next job is worth taking.

A practical checklist

1. Find the document and the signature/renewal date.
2. Identify your category: health care professional? low-wage? neither?
3. If you were fired: for cause? was disclosed severance (or other payment) actually provided?
4. Separate the stacks: NDA / noncompete / nonsolicit / repayment.
5. Preserve performance evidence before (and right after) separation.
6. Do not turn down the offer—or ignore a cease-and-desist—without advice.

Talk to us before you turn down the job

If a noncompete is standing between you and your next position—or a former employer has already threatened you—do not simply comply or ignore it.

Start a free, confidential conflict check, upload the agreement to your secure Cloud Counsel file, and let us evaluate whether the covenant survives Virginia’s 2026 rules.

The bottom line

Virginia did not abolish every workplace restraint. It narrowed when an employer can use a post-employment noncompete as a leash—especially after a without-cause firing without disclosed severance, and for covered health care professionals on new agreements.

The old assumption—“once you sign a noncompete, you’re stuck forever”—is weaker in Virginia than it used to be. Use the opening. Build the file. Then decide with counsel.