VirginiaSB1702026 Regular SessionSenateWALLET

Protection of employees; covenants not to compete, discharged employees.

Sponsored By: Jeremy S. McPike (Democratic)

Signed by Governor

Summary

Protection of employees; covenants not to compete; discharged employees. Provides that no covenant not to compete, as such term is defined in existing law, between an employer and an employee is enforceable if such employer discharges such employee from employment without providing severance benefits or other monetary payment to such employee that is disclosed upon execution of the covenant not to compete, unless the employee is discharged for cause. This bill incorporates SB 569.

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Bill Overview

Analyzed Economic Effects

2 provisions identified: 1 benefits, 1 costs, 0 mixed.

Noncompete limits protect qualifying Virginia workers

Virginia employers cannot make, enforce, or threaten to enforce noncompete agreements against qualifying workers. These agreements limit work for competitors after a job ends. Covered workers include employees earning below Virginia’s average weekly wage and employees entitled to federal overtime after 40 hours. Weekly earnings are averaged over the 52 weeks before termination, or the weeks actually paid if fewer. Interns, students, apprentices, and trainees gaining work experience are covered, whether paid or unpaid. Independent contractors qualify when their hourly pay falls below Virginia’s median hourly wage for all occupations in the previous year. Employees paid mainly through sales commissions, incentives, or bonuses are excluded. A noncompete also cannot block former employees from serving an employer’s customers unless they first contact or solicit those customers. The act does not change contracts entered into, amended, or renewed before July 1, 2026.

Fewer noncompete enforcement tools for workers

The final act removes the severance-related provisions rather than creating a separate noncompete protection for workers discharged without severance. It also removes provisions for private lawsuits and civil penalties tied to prohibited noncompetes. Employers still must post the law or an approved summary where other employee notices appear. Posting violations bring a written warning first, then a possible fine of up to $250 for the second violation. The third and each later violation can bring a fine of up to $1,000 per violation. Virginia’s labor commissioner sets procedures for paying uncontested penalties, including reductions or settlements without admitting civil liability. These fines go to the state’s General Fund.

Sponsors & Cosponsors

Sponsor

  • Jeremy S. McPike

    Democratic • Senate

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

All Roll Calls

Yes: 227 • No: 16

House vote • 3/4/2026

Passed House

Yes: 87 • No: 12

House vote • 2/27/2026

Reported from Appropriations

Yes: 18 • No: 4

House vote • 2/24/2026

Reported from Labor and Commerce and referred to Appropriations

Yes: 22 • No: 0

House vote • 2/19/2026

Subcommittee recommends reporting

Yes: 7 • No: 0

Senate vote • 2/6/2026

Read third time and passed Senate Block Vote

Yes: 40 • No: 0

Senate vote • 2/5/2026

Engrossed by Senate Block Vote (Voice Vote)

Yes: 0 • No: 0

Senate vote • 2/5/2026

Commerce and Labor Substitute 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 (CHAP0883)

    4/13/2026Governor
  2. Approved by Governor-Chapter 883 (effective 7/1/2026)

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

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

    3/14/2026Senate
  5. Fiscal Impact Statement from Department of Planning and Budget (SB170)

    3/11/2026Senate
  6. Bill text as passed Senate and House (SB170ER)

    3/10/2026Senate
  7. Enrolled

    3/10/2026Senate
  8. Signed by President

    3/10/2026Senate
  9. Signed by Speaker

    3/10/2026House
  10. Passed House (87-Y 12-N 0-A)

    3/4/2026House
  11. Read third time

    3/4/2026House
  12. Read second time

    3/3/2026House
  13. Reported from Appropriations (18-Y 4-N)

    2/27/2026House
  14. Assigned HAPP sub: Commerce Agriculture & Natural Resources

    2/25/2026House
  15. Reported from Labor and Commerce and referred to Appropriations (22-Y 0-N)

    2/24/2026House
  16. Subcommittee recommends reporting (7-Y 0-N)

    2/19/2026House
  17. Assigned HCL sub: Subcommittee #2

    2/17/2026House
  18. Referred to Committee on Labor and Commerce

    2/12/2026House
  19. Read first time

    2/12/2026House
  20. Placed on Calendar

    2/12/2026House
  21. Fiscal Impact Statement from Department of Planning and Budget (SB170)

    2/10/2026Senate
  22. Read third time and passed Senate Block Vote (40-Y 0-N 0-A)

    2/6/2026Senate
  23. Engrossed by Senate Block Vote (Voice Vote)

    2/5/2026Senate
  24. Commerce and Labor Substitute agreed to

    2/5/2026Senate
  25. Engrossed by Senate - committee substitute Block Vote (Voice Vote)

    2/5/2026Senate

Bill Text

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