Are Non-Competes Enforceable in Virginia? (2026)

When Virginia Courts Uphold a Non-Compete

Virginia has no statute that blesses non-competes across the board. Instead, courts start from a general rule against contracts that lock up the market. Under Va. Code Ann. § 59.1-9.5, every contract, combination or conspiracy in restraint of trade or commerce in the Commonwealth is unlawful.

Generally speaking, that means a restriction survives only when it is narrow enough to protect a real business interest without shutting a worker out of their field. Timing matters too. A written contract signed by the party being sued typically carries a five-year statute of limitations under Va. Code Ann. § 8.01-246, so an old agreement may no longer be a live threat.

Workers Virginia Law Shields From Non-Competes

Some employees are simply off limits. Va. Code Ann. § 40.1-28.7:8 says no employer may enter into, enforce, or threaten to enforce a covenant not to compete with a low-wage employee or a health care professional. Employers who break that rule face a civil penalty of $10,000 for each violation.

The definition is broader than most people expect. It covers:

• Anyone earning less than the average weekly wage of the Commonwealth, calculated under Va. Code Ann. § 65.2-500
• Any worker entitled to overtime pay after 40 hours in a week
• Interns, students, apprentices and trainees, paid or unpaid
• Professionals licensed by the Boards of Medicine, Nursing, Counseling, Optometry, Psychology or Social Work

Calling someone a contractor does not solve the problem for an employer. A misclassified worker may sue under Va. Code Ann. § 40.1-28.7:7, which presumes that a person paid for services is an employee.

Severance Employers Must Provide to Enforce a Non-Compete

This is the rule most businesses miss. A covenant not to compete is unenforceable if the employer discharges the employee without severance benefits or another monetary payment, unless the firing was for cause. The payment must also be disclosed when the agreement is signed – not offered later as an afterthought.

So an employee who is let go in a layoff, with no severance, may be free of the restriction entirely. A worker who believes a former employer is pushing an unlawful covenant can file a civil action within two years, and a court may void the agreement, award lost compensation and order the employer to pay attorney fees.

Why One Unreasonable Term Can Void the Whole Agreement

Virginia courts read these documents strictly and against the employer who drafted them. A term that reaches too far in time, geography or job duties can sink the covenant instead of being trimmed to something workable.

The stakes can run higher than a lost lawsuit. Under Va. Code Ann. § 59.1-9.12, a person injured in their business or property by an unlawful restraint of trade may recover actual damages, costs and attorney fees, and a court may triple that recovery when the violation is willful or flagrant.

Restrictions Employers Can Still Use After Someone Leaves

Losing a non-compete does not leave a business defenseless. Va. Code Ann. § 59.1-336 protects any formula, method, program or compilation that carries economic value because it is not publicly known and is kept secret through reasonable effort.

Courts may enjoin actual or threatened misappropriation under Va. Code Ann. § 59.1-337. Money follows: Va. Code Ann. § 59.1-338 allows actual loss plus unjust enrichment, and punitive damages up to twice that award or $350,000, whichever is less, for willful and malicious conduct.

Bad-faith claims cut both ways, since Va. Code Ann. § 59.1-338.1 lets a judge shift attorney fees to the prevailing party. These suits must be filed within three years of discovery under Va. Code Ann. § 59.1-340, and Va. Code Ann. § 59.1-341 confirms that contract claims survive alongside them. Nondisclosure agreements covering confidential information and narrow customer non-solicitation terms also remain available.

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