VirginiaSB1282026 Regular SessionSenateWALLET

Covenants not to compete; includes health care professionals, civil penalty.

Sponsored By: Schuyler T. VanValkenburg (Democratic)

Signed by Governor

Summary

Covenants not to compete; health care professionals; civil penalty. Adds health care professionals as a category of employee with or upon whom no employer shall enter into, enforce, or threaten to enforce a covenant not to compete. The bill defines "health care professional" as any person licensed, registered, or certified by the Board of Medicine, Nursing, Counseling, Optometry, Psychology, or Social Work. The bill provides that any employer that violates the prohibition against covenants not to compete with a health care professional is subject to the civil penalty in current law of $10,000 for each violation. This bill is identical to HB 627.

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Bill Overview

Analyzed Economic Effects

6 provisions identified: 1 benefits, 2 costs, 3 mixed.

Worker noncompete ban leaves older agreements unchanged

Employers cannot make, enforce, or threaten to enforce noncompetes against covered low-wage workers or health care professionals. Noncompetes restrict work that competes with a former employer after employment ends. Covered professionals hold licenses, registrations, or certifications from Virginia’s Medicine, Nursing, Counseling, Optometry, Psychology, or Social Work boards. Low-wage coverage includes workers earning below Virginia’s average weekly wage, using earnings from the 52 weeks before employment ends. Total earnings are divided by 52, or by actual weeks paid when fewer than 52. Coverage also includes workers entitled to federal overtime after 40 hours, regardless of earnings, and interns, students, apprentices, and trainees. Independent contractors qualify when their hourly pay falls below Virginia’s prior-year median hourly wage for all occupations, reported by the Bureau of Labor Statistics. Workers paid mainly through sales commissions, incentives, or bonuses are excluded from the low-wage definition. Workers can serve former employers’ customers when they did not initiate contact or solicit them. However, the law leaves agreements entered into or renewed before July 1, 2026, unchanged.

Workers can challenge unlawful noncompetes

Covered workers can sue a former employer or another person who tries to enforce an unlawful noncompete. The filing deadline is two years after the latest of four events: signing, learning of the agreement, employment ending, or an enforcement step. Courts can cancel the agreement, block enforcement, and award lost pay, liquidated damages, other damages, and reasonable legal fees and costs. Winning workers can also recover reasonable expert-witness fees. Employers cannot fire, threaten, discriminate against, or otherwise punish workers for bringing the case.

Health care workers face recruiting repayment

Employers can require covered health care professionals to repay recruiting costs through an employment agreement. This applies when the professional has worked for that employer for fewer than five years. Repayment can cover all or a prorated share of moving costs, signing or retention bonuses, and other recruiting payments. Recruiting, education, and training expenses can also be covered. The law sets no repayment amount or formula.

Employers face noncompete fines and notices

Employers face a $10,000 civil penalty for each noncompete violation the Commissioner finds. Every employer must post the law’s noncompete rules or a Department-approved summary alongside other required employee notices. Failure to post brings a written warning first, up to $250 second, and up to $1,000 for each later violation. Penalties go to Virginia’s general fund, not directly to workers. The Commissioner sets procedures for uncontested penalties, including correcting violations or paying a negotiated amount without admitting liability.

Health care workers face patient solicitation limits

Employers can enforce narrow agreements limiting a health care professional’s efforts to seek customer business after leaving. Agreements must state a time period and cover only customers or actively sought prospects the professional had material contact with. Limits apply only to the same or substantially similar products or services the employer provided. Legally required communications remain allowed. Professionals can tell patients they treated or consulted about their continuing practice, new contact details, and right to choose a professional.

Health practice sales keep limited noncompetes

Agreements can still protect trade secrets and private or proprietary business information, but cannot disguise a banned noncompete. Certain noncompetes remain allowed when a health care professional or their business sells a practice or business. Qualifying sales cover all or substantially all operating assets plus goodwill, division or subsidiary assets plus goodwill, or ownership interests. These sale-related limits must be reasonable in scope, length, and geographic area.

Sponsors & Cosponsors

Sponsor

  • Schuyler T. VanValkenburg

    Democratic • Senate

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

All Roll Calls

Yes: 355 • No: 8

Senate vote • 4/22/2026

Governor's recommendation No. 2 passed by (Voice Vote)

Yes: 0 • No: 0

House vote • 4/22/2026

Governor's amendment no. 1 agreed to

Yes: 97 • No: 1

Senate vote • 4/22/2026

Senate concurred in Governor's recommendation No. 1

Yes: 39 • No: 0

House vote • 3/6/2026

Passed House

Yes: 92 • No: 6

House vote • 2/26/2026

Reported from Labor and Commerce

Yes: 20 • No: 1

Senate vote • 2/13/2026

Read third time and passed Senate Block Vote

Yes: 39 • No: 0

Senate vote • 2/12/2026

Engrossed by Senate Block Vote (Voice Vote)

Yes: 0 • No: 0

Senate vote • 2/11/2026

Reported from Finance and Appropriations

Yes: 15 • No: 0

Senate vote • 2/5/2026

Commerce and Labor Substitute agreed to

Yes: 0 • No: 0

Senate vote • 2/5/2026

Motion to rerefer to Finance and Appropriations agreed to

Yes: 0 • No: 0

Senate vote • 2/4/2026

Passed by for the day Block Vote (Voice Vote)

Yes: 0 • No: 0

Senate vote • 2/4/2026

Constitutional reading dispensed Block Vote (on 1st reading)

Yes: 40 • No: 0

Senate vote • 2/2/2026

Reported from Commerce and Labor with substitute

Yes: 13 • No: 0

Actions Timeline

  1. Acts of Assembly Chapter text (CHAP1114)

    5/14/2026Governor
  2. Approved by Governor-Chapter 1114 (effective 7/1/2026)

    5/14/2026Governor
  3. Governor's amendment no. 1 agreed to (97-Y 1-N 0-A)

    4/22/2026House
  4. Governor's recommendation No. 2 passed by (Voice Vote)

    4/22/2026Senate
  5. Senate concurred in Governor's recommendation No. 1 (39-Y 0-N 0-A)

    4/22/2026Senate
  6. Reenrolled bill text (SB128ER2)

    4/22/2026Senate
  7. Reenrolled

    4/22/2026Senate
  8. Governor's Action Deadline 11:59 p.m., May 23, 2026

    4/22/2026Governor
  9. Communicated to Governor

    4/22/2026Senate
  10. Signed by President

    4/22/2026Senate
  11. Signed by Speaker

    4/22/2026House
  12. Governor's recommendation adopted

    4/22/2026Governor
  13. Governor's recommendation received by Senate

    4/11/2026Governor
  14. Governor's Action Deadline 11:59 p.m., April 13, 2026

    3/14/2026Governor
  15. Enrolled Bill communicated to Governor on March 14, 2026

    3/14/2026Senate
  16. Fiscal Impact Statement from Department of Planning and Budget (SB128)

    3/12/2026Senate
  17. Bill text as passed Senate and House (SB128ER)

    3/12/2026Senate
  18. Enrolled

    3/12/2026Senate
  19. Signed by President

    3/12/2026Senate
  20. Signed by Speaker

    3/12/2026House
  21. Passed House (92-Y 6-N 0-A)

    3/6/2026House
  22. Read third time

    3/6/2026House
  23. Read second time

    3/5/2026House
  24. Reported from Labor and Commerce (20-Y 1-N)

    2/26/2026House
  25. Referred to Committee on Labor and Commerce

    2/18/2026House

Bill Text

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