Virginia Tightens Noncompete Rules, Adds Severance and Healthcare Worker Protections
Virginia now bans most healthcare worker noncompetes and requires severance for enforceable noncompetes.
Why it matters: Virginia employers and legal advisors must revisit employment contract strategies. The laws expand worker protections, impact enforceability, and highlight a shift toward employee-friendly policies.
- SB128 bans noncompete agreements for health care professionals, except in business sale situations.
- Employers violating the healthcare noncompete ban face a $10,000 civil penalty per violation.
- SB170 makes noncompetes unenforceable without disclosed severance if an employee is terminated without cause.
- Employers must disclose severance terms upfront and post required notices or risk civil penalties.
Virginia has enacted two significant measures, SB128 and SB170, restricting the use of noncompete agreements. SB128 prohibits employers from entering into or enforcing noncompetes with healthcare professionals—including those licensed by state medical, nursing, and related boards—outside of business sales.
- Violations can result in a $10,000 civil penalty for each infraction of the healthcare worker provision.
- Employers must also post notices about these rights; noncompliance can lead to escalating penalties (from a warning to $1,000).
SB170 fundamentally shifts noncompete enforcement for all employees. To enforce a noncompete against a terminated employee (other than "for cause"), employers must provide severance or other monetary payment—fully disclosed when the noncompete is signed. Failure to comply renders the agreement unenforceable.
- Employees may sue if employers attempt to enforce agreements in violation of these laws; courts may void noncompetes and award damages and attorney fees.
- Legal analysts note these changes are part of Virginia's trajectory toward more employee-friendly law. "SB 170 would be a seismic development... Virginia is being made into an employee-friendly state," said Declan Leonard, Employment Law Practice Leader at Berenzweig Leonard.
- Tom Spiggle of The Spiggle Law Firm emphasized: "If a company wants to restrict a worker’s mobility after firing them without cause, they must now provide severance benefits, and those terms must be disclosed upfront when the agreement is signed."
The new law stops short of specifying exact severance amounts or defining "for cause" terminations, leaving interpretative gaps for courts and counsel.
By the numbers:
- $10,000 — penalty per violation for employers enforcing banned noncompetes with healthcare professionals
- Up to $1,000 — penalty for employers repeatedly failing to post notice of these rights
- Severance disclosure — required at the time the noncompete agreement is executed
Yes, but: Definitions for 'for cause' termination and the required severance amount remain undefined, creating ambiguity for employers.