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Virginia Non Compete Agreement Enforceability

When employees sign a non-compete agreement, they are essentially agreeing that they will not work for a competitor or start their own competing business for a specific period of time after leaving their current employer. Non-compete agreements are common in Virginia and are often used by employers to protect their business interests, such as trade secrets, confidential information, and customer relationships.

However, the enforceability of non-compete agreements in Virginia has been a controversial and evolving topic in recent years. In 2020, the Virginia General Assembly passed a new law that made significant changes to the state`s non-compete agreement regulations. Here are some key things you need to know about the enforceability of non-compete agreements in Virginia:

1. Previous Virginia law favored employers

Before the new law was passed, Virginia had a reputation for being one of the most pro-employer states when it came to non-compete agreements. Virginia courts would generally enforce non-compete agreements unless they were deemed to be overly broad or unreasonable in scope, duration, or geographic area. This meant that employers had a lot of leeway in drafting non-compete agreements that would effectively restrict employees` job opportunities after leaving the company.

2. The new law adds more protections for employees

Under the new law, which took effect on July 1, 2020, employers must meet certain requirements in order for a non-compete agreement to be enforceable. For example, the agreement must be narrowly tailored to protect the employer`s legitimate business interests, such as trade secrets or client relationships. The agreement must also be reasonable in terms of duration and geographic scope, and cannot unduly burden the employee`s ability to earn a living.

3. Non-compete agreements may not be enforceable for lower-wage workers

One significant change under the new law is that non-compete agreements are presumed to be unenforceable for employees who earn less than the average weekly wage in Virginia, which is currently $1,137 per week. This means that employers cannot require lower-wage employees to sign non-compete agreements as a condition of employment or continued employment. However, there are exceptions for certain professions, such as doctors, lawyers, and executives.

4. Courts will have more discretion in enforcing non-compete agreements

Under the new law, Virginia courts will have more discretion in deciding whether to enforce a non-compete agreement. For example, a court may modify a non-compete agreement if it finds that it is overbroad or unfair to the employee. The court may also award attorneys` fees to the employee if the employer tries to enforce an unenforceable agreement.

In conclusion, the enforceability of non-compete agreements in Virginia has become more complex and employee-friendly in recent years. Employers should be aware of the new regulations and ensure that their non-compete agreements comply with the law. Employees who are presented with a non-compete agreement should carefully review the terms and seek legal advice if necessary.