On March 24, 2025, Virginia Governor Glenn Younkin signed into law S.B. 1218, which amended Virginia’s non-compete law to expand the definition of “low-wage employees” with whom employers may not enter into non-competition agreements. 

A “low-wage employee” previously was defined as any employee whose average weekly earnings fell below the Virginia average weekly wage. For 2025, this equated to $1,463 per week, or $76,081 annually. The amendment expands the definition of “low-wage employee” to include any employee who, regardless of their average weekly earnings, is entitled to overtime compensation under the federal Fair Labor Standards Act (“FLSA”) (for hours worked over 40 hours in a given week). The amendment will take effect on July 1, 2025.

The other provisions of Virginia’s non-compete statute, Virginia Code § 40.1-28.7:8, were not modified, and contain several noteworthy features. The statute provides a private right of action for low-wage employees against any employer who attempts to enforce a non-compete in violation of the statute, and if they prevail, the statute authorizes a court to award liquidated damages, lost compensation, and attorneys’ fees. Employers may also be subject to a civil penalty of $10,000 for each violation of the statute. Also, employers must post a copy of the statute or a summary approved by the Virginia Department of Labor and Industry alongside other federal or state required notices, or risk civil penalties. 

Employers with employees in Virginia should revisit their non-competition agreements for compliance in light of the recent amendment. 

Photo of Steven J. Pearlman Steven J. Pearlman

Steven J. Pearlman is a partner in the Labor & Employment Law Department and co-head of the firm’s Whistleblowing & Retaliation Group. Steven’s practice focuses on defending complex employment litigation involving claims of discrimination, harassment and retaliation; wage-and-hour laws; breach of employment contract…

Steven J. Pearlman is a partner in the Labor & Employment Law Department and co-head of the firm’s Whistleblowing & Retaliation Group. Steven’s practice focuses on defending complex employment litigation involving claims of discrimination, harassment and retaliation; wage-and-hour laws; breach of employment contract; and restrictive covenants (e.g., non-competition agreements). Steven is also at the forefront of defending whistleblower retaliation claims, and routinely conducts investigations arising from whistleblower reports. He has successfully tried cases to verdict in Illinois, Florida and California, and defended what is reported to be the largest Illinois-only class action in the history of the U.S. District Court for the Northern District of Illinois. He has also testified in defense of his investigations in federal court.