Virginia Law Links Noncompete Enforcement to Severance Payment

New Virginia statute bars noncompete enforcement when employers terminate without cause and provide no severance.

HR Solution Journal News Desk

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Virginia Governor Abigail Spanberger signed SB170, effective July 1, 2026, requiring employers to provide severance to enforce noncompetes after terminations without cause. The rule extends to all employees, not just low-wage workers. Severance must be disclosed when the agreement is signed, not after termination. Exceptions apply for terminations for cause or voluntary resignations. Agreements signed before July 1, 2026 are grandfathered. Penalties include civil fines up to $10,000 per violation, voided agreements, and employee recovery of lost compensation and legal fees. HR teams should update restrictive covenant templates, define cause clearly in contracts, and post required statutory notices.

Source: HR Daily Advisor. Original announcement: October 13, 2026.