{"formats":[{"name":"JSON","format":"json","url":"\/downloads\/2025\/code-json\/40.1-28.7_8.json"},{"name":"Plain Text","format":"text","url":"\/downloads\/2025\/code-text\/40.1-28.7_8.txt"},{"name":"XML","format":"xml","url":"\/downloads\/2025\/code-xml\/40.1-28.7_8.xml"},{"name":"HTML","format":"html","url":"\/downloads\/2025\/code-html\/40.1-28.7_8.html"}],"law_id":64853,"edition_id":1,"section_id":64853,"structure_id":13640,"section_number":"40.1-28.7:8","catch_line":"Covenants not to compete prohibited; exceptions; civil penalty","history":"2020, cc. 948, 949, \u00a7 40.1-28.7:7; 2025, c. 585.","full_text":"A\n\nAs used in this section:\n\t\t\t“Covenant not to compete” means a covenant or agreement, including a provision of a contract of employment, between an employer and employee that restrains, prohibits, or otherwise restricts an individual’s ability, following the termination of the individual’s employment, to compete with his former employer. A “covenant not to compete” shall not restrict an employee from providing a service to a customer or client of the employer if the employee does not initiate contact with or solicit the customer or client.\n\t\t\t“Low-wage employee” means an employee (i) whose average weekly earnings, calculated by dividing the employee’s earnings during the period of 52 weeks immediately preceding the date of termination of employment by 52, or if an employee worked fewer than 52 weeks, by the number of weeks that the employee was actually paid during the 52-week period, are less than the average weekly wage of the Commonwealth as determined pursuant to subsection B of § 65.2-500 or (ii) who, regardless of his average weekly earnings, is entitled to overtime compensation under the provisions of 29 U.S.C. § 207 for any hours worked in excess of 40 hours in any one workweek. “Low-wage employee” includes interns, students, apprentices, or trainees employed, with or without pay, at a trade or occupation in order to gain work or educational experience. “Low-wage employee” also includes an individual who has independently contracted with another person to perform services independent of an employment relationship and who is compensated for such services by such person at an hourly rate that is less than the median hourly wage for the Commonwealth for all occupations as reported, for the preceding year, by the Bureau of Labor Statistics of the U.S. Department of Labor. For the purposes of this section, “low-wage employee” shall not include any employee whose earnings are derived, in whole or in predominant part, from sales commissions, incentives, or bonuses paid to the employee by the employer.B\n\nNo employer shall enter into, enforce, or threaten to enforce a covenant not to compete with any low-wage employee.C\n\nNothing in this section shall serve to limit the creation or application of nondisclosure agreements intended to prohibit the taking, misappropriating, threatening to misappropriate, or sharing of certain information to which an employee has access, including trade secrets, as defined in § 59.1-336, and proprietary or confidential information.D\n\nA low-wage employee may bring a civil action in a court of competent jurisdiction against any former employer or other person that attempts to enforce a covenant not to compete against such employee in violation of this section. An action under this section shall be brought within two years of the latter of (i) the date the covenant not to compete was signed, (ii) the date the low-wage employee learns of the covenant not to compete, (iii) the date the employment relationship is terminated, or (iv) the date the employer takes any step to enforce the covenant not to compete. The court shall have jurisdiction to void any covenant not to compete with a low-wage employee and to order all appropriate relief, including enjoining the conduct of any person or employer, ordering payment of liquidated damages, and awarding lost compensation, damages, and reasonable attorney fees and costs. No employer may discharge, threaten, or otherwise discriminate or retaliate against a low-wage employee for bringing a civil action pursuant to this section.E\n\nAny employer that violates the provisions of subsection B as determined by the Commissioner shall be subject to a civil penalty of $10,000 for each violation. Civil penalties owed under this subsection shall be paid to the Commissioner for deposit in the general fund.F\n\nIf the court finds a violation of the provisions of this section, the plaintiff shall be entitled to recover reasonable costs, including costs and reasonable fees for expert witnesses, and attorney fees from the former employer or other person who attempts to enforce an unlawful covenant not to compete against such plaintiff.G\n\nEvery employer shall post a copy of this section or a summary approved by the Department in the same location where other employee notices required by state or federal law are posted. An employer that fails to post a copy of this section or an approved summary of this section shall be issued by the Department a written warning for the first violation, shall be subject to a civil penalty not to exceed $250 for a second violation, and shall be subject to a civil penalty not to exceed $1,000 for a third and each subsequent violation as determined by the Commissioner. Civil penalties owed under this subsection shall be paid to the Commissioner for deposit in the general fund.\n\t\t\tThe Commissioner shall prescribe procedures for the payment of proposed assessments of penalties that are not contested by employers. Such procedures shall include provisions for an employer to consent to abatement of the alleged violation and to pay a proposed penalty or a negotiated sum in lieu of such penalty without admission of any civil liability arising from such alleged violation.","order_by":null,"text":{"0":{"id":236018,"text":"As used in this section:\n\t\t\t“Covenant not to compete” means a covenant or agreement, including a provision of a contract of employment, between an employer and employee that restrains, prohibits, or otherwise restricts an individual’s ability, following the termination of the individual’s employment, to compete with his former employer. A “covenant not to compete” shall not restrict an employee from providing a service to a customer or client of the employer if the employee does not initiate contact with or solicit the customer or client.\n\t\t\t“Low-wage employee” means an employee (i) whose average weekly earnings, calculated by dividing the employee’s earnings during the period of 52 weeks immediately preceding the date of termination of employment by 52, or if an employee worked fewer than 52 weeks, by the number of weeks that the employee was actually paid during the 52-week period, are less than the average weekly wage of the Commonwealth as determined pursuant to subsection B of § 65.2-500 or (ii) who, regardless of his average weekly earnings, is entitled to overtime compensation under the provisions of 29 U.S.C. § 207 for any hours worked in excess of 40 hours in any one workweek. “Low-wage employee” includes interns, students, apprentices, or trainees employed, with or without pay, at a trade or occupation in order to gain work or educational experience. “Low-wage employee” also includes an individual who has independently contracted with another person to perform services independent of an employment relationship and who is compensated for such services by such person at an hourly rate that is less than the median hourly wage for the Commonwealth for all occupations as reported, for the preceding year, by the Bureau of Labor Statistics of the U.S. Department of Labor. For the purposes of this section, “low-wage employee” shall not include any employee whose earnings are derived, in whole or in predominant part, from sales commissions, incentives, or bonuses paid to the employee by the employer.","type":"section","prefixes":["A"],"prefix":"A","entire_prefix":"A","prefix_anchor":"A","level":1,"next_prefix":"B"},"1":{"id":236019,"text":"No employer shall enter into, enforce, or threaten to enforce a covenant not to compete with any low-wage employee.","type":"section","prefixes":["B"],"prefix":"B","entire_prefix":"B","prefix_anchor":"B","level":1,"prior_prefix":"A","next_prefix":"C"},"2":{"id":236020,"text":"Nothing in this section shall serve to limit the creation or application of nondisclosure agreements intended to prohibit the taking, misappropriating, threatening to misappropriate, or sharing of certain information to which an employee has access, including trade secrets, as defined in § 59.1-336, and proprietary or confidential information.","type":"section","prefixes":["C"],"prefix":"C","entire_prefix":"C","prefix_anchor":"C","level":1,"prior_prefix":"B","next_prefix":"D"},"3":{"id":236021,"text":"A low-wage employee may bring a civil action in a court of competent jurisdiction against any former employer or other person that attempts to enforce a covenant not to compete against such employee in violation of this section. An action under this section shall be brought within two years of the latter of (i) the date the covenant not to compete was signed, (ii) the date the low-wage employee learns of the covenant not to compete, (iii) the date the employment relationship is terminated, or (iv) the date the employer takes any step to enforce the covenant not to compete. The court shall have jurisdiction to void any covenant not to compete with a low-wage employee and to order all appropriate relief, including enjoining the conduct of any person or employer, ordering payment of liquidated damages, and awarding lost compensation, damages, and reasonable attorney fees and costs. No employer may discharge, threaten, or otherwise discriminate or retaliate against a low-wage employee for bringing a civil action pursuant to this section.","type":"section","prefixes":["D"],"prefix":"D","entire_prefix":"D","prefix_anchor":"D","level":1,"prior_prefix":"C","next_prefix":"E"},"4":{"id":236022,"text":"Any employer that violates the provisions of subsection B as determined by the Commissioner shall be subject to a civil penalty of $10,000 for each violation. Civil penalties owed under this subsection shall be paid to the Commissioner for deposit in the general fund.","type":"section","prefixes":["E"],"prefix":"E","entire_prefix":"E","prefix_anchor":"E","level":1,"prior_prefix":"D","next_prefix":"F"},"5":{"id":236023,"text":"If the court finds a violation of the provisions of this section, the plaintiff shall be entitled to recover reasonable costs, including costs and reasonable fees for expert witnesses, and attorney fees from the former employer or other person who attempts to enforce an unlawful covenant not to compete against such plaintiff.","type":"section","prefixes":["F"],"prefix":"F","entire_prefix":"F","prefix_anchor":"F","level":1,"prior_prefix":"E","next_prefix":"G"},"6":{"id":236024,"text":"Every employer shall post a copy of this section or a summary approved by the Department in the same location where other employee notices required by state or federal law are posted. An employer that fails to post a copy of this section or an approved summary of this section shall be issued by the Department a written warning for the first violation, shall be subject to a civil penalty not to exceed $250 for a second violation, and shall be subject to a civil penalty not to exceed $1,000 for a third and each subsequent violation as determined by the Commissioner. Civil penalties owed under this subsection shall be paid to the Commissioner for deposit in the general fund.\n\t\t\tThe Commissioner shall prescribe procedures for the payment of proposed assessments of penalties that are not contested by employers. Such procedures shall include provisions for an employer to consent to abatement of the alleged violation and to pay a proposed penalty or a negotiated sum in lieu of such penalty without admission of any civil liability arising from such alleged violation.","type":"section","prefixes":["G"],"prefix":"G","entire_prefix":"G","prefix_anchor":"G","level":1,"prior_prefix":"F"}},"ancestry":[{"id":13640,"edition_id":1,"name":"General Provisions","identifier":"1","label":"article","depth":3,"order_by":1,"parent_id":12777,"metadata":{},"date_created":"2026-06-26 03:45:27","date_modified":"2026-06-26 03:45:27","permalink":{"id":219807,"object_type":"structure","relational_id":13640,"identifier":"1","token":"40.1\/3\/1","url":"\/40.1\/3\/1\/","edition_id":1,"permalink":0,"preferred":1}},{"id":12777,"edition_id":1,"name":"Protection of Employees","identifier":"3","label":"chapter","depth":2,"order_by":1,"parent_id":12776,"metadata":{},"date_created":"2026-06-26 03:43:52","date_modified":"2026-06-26 03:43:52","permalink":{"id":219805,"object_type":"structure","relational_id":12777,"identifier":"3","token":"40.1\/3","url":"\/40.1\/3\/","edition_id":1,"permalink":0,"preferred":1}},{"id":12776,"edition_id":1,"name":"Labor and Employment","identifier":"40.1","label":"title","depth":1,"order_by":1,"parent_id":null,"metadata":{},"date_created":"2026-06-26 03:43:52","date_modified":"2026-06-26 03:43:52","permalink":{"id":219723,"object_type":"structure","relational_id":12776,"identifier":"40.1","token":"40.1","url":"\/40.1\/","edition_id":1,"permalink":0,"preferred":1}}],"structure_contents":[{"id":77584,"structure_id":13640,"section_number":"40.1-22","catch_line":"Safety and Health Codes Commission continued as Safety and Health Codes Board","url":"\/40.1-22\/","token":"40.1\/3\/1\/40.1-22","metadata":false},{"id":67414,"structure_id":13640,"section_number":"40.1-22.1","catch_line":"Governor authorized to enter certain agreements","url":"\/40.1-22.1\/","token":"40.1\/3\/1\/40.1-22.1","metadata":false},{"id":64288,"structure_id":13640,"section_number":"40.1-23","catch_line":"Repealed","url":"\/40.1-23\/","token":"40.1\/3\/1\/40.1-23","metadata":false},{"id":66063,"structure_id":13640,"section_number":"40.1-26","catch_line":"Repealed","url":"\/40.1-26\/","token":"40.1\/3\/1\/40.1-26","metadata":false},{"id":56917,"structure_id":13640,"section_number":"40.1-27","catch_line":"Preventing employment by others of former employee","url":"\/40.1-27\/","token":"40.1\/3\/1\/40.1-27","metadata":false},{"id":54740,"structure_id":13640,"section_number":"40.1-27.1","catch_line":"Discharge of employee for absence due to work-related injury prohibited","url":"\/40.1-27.1\/","token":"40.1\/3\/1\/40.1-27.1","metadata":false},{"id":74658,"structure_id":13640,"section_number":"40.1-27.2","catch_line":"Preference for veterans and spouses","url":"\/40.1-27.2\/","token":"40.1\/3\/1\/40.1-27.2","metadata":false},{"id":82455,"structure_id":13640,"section_number":"40.1-27.3","catch_line":"Retaliatory action against employee prohibited","url":"\/40.1-27.3\/","token":"40.1\/3\/1\/40.1-27.3","metadata":false},{"id":78662,"structure_id":13640,"section_number":"40.1-27.4","catch_line":"Discipline for employee's medicinal use of cannabis oil prohibited","url":"\/40.1-27.4\/","token":"40.1\/3\/1\/40.1-27.4","metadata":false},{"id":70077,"structure_id":13640,"section_number":"40.1-28","catch_line":"Unlawful to require payment for medical examination as condition of employment","url":"\/40.1-28\/","token":"40.1\/3\/1\/40.1-28","metadata":false},{"id":68891,"structure_id":13640,"section_number":"40.1-28.01","catch_line":"Nondisclosure or confidentiality agreement; provisions regarding sexual assault or sexual harassment; condition of employment","url":"\/40.1-28.01\/","token":"40.1\/3\/1\/40.1-28.01","metadata":false},{"id":60284,"structure_id":13640,"section_number":"40.1-28.1","catch_line":"Repealed","url":"\/40.1-28.1\/","token":"40.1\/3\/1\/40.1-28.1","metadata":false},{"id":63131,"structure_id":13640,"section_number":"40.1-28.5","catch_line":"Repealed","url":"\/40.1-28.5\/","token":"40.1\/3\/1\/40.1-28.5","metadata":false},{"id":79328,"structure_id":13640,"section_number":"40.1-28.6","catch_line":"Equal pay irrespective of sex","url":"\/40.1-28.6\/","token":"40.1\/3\/1\/40.1-28.6","metadata":false},{"id":68884,"structure_id":13640,"section_number":"40.1-28.7","catch_line":"Repealed","url":"\/40.1-28.7\/","token":"40.1\/3\/1\/40.1-28.7","metadata":false},{"id":64716,"structure_id":13640,"section_number":"40.1-28.7:1","catch_line":"Genetic testing or genetic characteristics as a condition of employment","url":"\/40.1-28.7_1\/","token":"40.1\/3\/1\/40.1-28.7_1","metadata":false},{"id":74612,"structure_id":13640,"section_number":"40.1-28.7:10","catch_line":"Prohibited use of employee's social security number; civil penalty","url":"\/40.1-28.7_10\/","token":"40.1\/3\/1\/40.1-28.7_10","metadata":false},{"id":63600,"structure_id":13640,"section_number":"40.1-28.7:11","catch_line":"Veterans benefits and services poster","url":"\/40.1-28.7_11\/","token":"40.1\/3\/1\/40.1-28.7_11","metadata":false},{"id":81572,"structure_id":13640,"section_number":"40.1-28.7:2","catch_line":"Employers to allow crime victims leave to attend criminal proceedings","url":"\/40.1-28.7_2\/","token":"40.1\/3\/1\/40.1-28.7_2","metadata":false},{"id":55131,"structure_id":13640,"section_number":"40.1-28.7:3","catch_line":"Earned income tax credit; employer notice to employee","url":"\/40.1-28.7_3\/","token":"40.1\/3\/1\/40.1-28.7_3","metadata":false},{"id":54612,"structure_id":13640,"section_number":"40.1-28.7:4","catch_line":"Release of employee's personal identifying information","url":"\/40.1-28.7_4\/","token":"40.1\/3\/1\/40.1-28.7_4","metadata":false},{"id":79093,"structure_id":13640,"section_number":"40.1-28.7:5","catch_line":"Social media accounts of current and prospective employees","url":"\/40.1-28.7_5\/","token":"40.1\/3\/1\/40.1-28.7_5","metadata":false},{"id":80547,"structure_id":13640,"section_number":"40.1-28.7:6","catch_line":"Employers to allow leave for volunteer members of Civil Air Patrol; civil remedy","url":"\/40.1-28.7_6\/","token":"40.1\/3\/1\/40.1-28.7_6","metadata":false},{"id":81771,"structure_id":13640,"section_number":"40.1-28.7:7","catch_line":"Misclassification of workers","url":"\/40.1-28.7_7\/","token":"40.1\/3\/1\/40.1-28.7_7","metadata":false},{"id":64853,"structure_id":13640,"section_number":"40.1-28.7:8","catch_line":"Covenants not to compete prohibited; exceptions; civil penalty","url":"\/40.1-28.7_8\/","token":"40.1\/3\/1\/40.1-28.7_8","metadata":false},{"id":58507,"structure_id":13640,"section_number":"40.1-28.7:9","catch_line":"Limiting employees' sharing wage information with other persons prohibited; civil penalty","url":"\/40.1-28.7_9\/","token":"40.1\/3\/1\/40.1-28.7_9","metadata":false}],"previous_section":{"id":81771,"structure_id":13640,"section_number":"40.1-28.7:7","catch_line":"Misclassification of workers","url":"\/40.1-28.7_7\/","token":"40.1\/3\/1\/40.1-28.7_7","metadata":false},"next_section":{"id":58507,"structure_id":13640,"section_number":"40.1-28.7:9","catch_line":"Limiting employees' sharing wage information with other persons prohibited; civil penalty","url":"\/40.1-28.7_9\/","token":"40.1\/3\/1\/40.1-28.7_9","metadata":false},"metadata":false,"official_url":"https:\/\/law.lis.virginia.gov\/vacode\/40.1-28.7:8\/","history_text":"

This law was first created in 2020. The record of its establishment is cataloged in chapters 948<\/a> and 949<\/a> of that year\u2019s edition of \u201cActs of Assembly,\u201d the annual state publication listing all changes made to the Code of Virginia in that year. It has been modified 1 time. Those modifications are cataloged by \u201cThe Acts of Assembly,\u201d a state publication, by year and chapter. Those modifications that can be read on the General Assembly\u2019s website will be linked accordingly. That modification is as follows: in 2025, chapter 585<\/a>.<\/p>","references":false,"refers_to":[{"id":73338,"section_number":"59.1-336","catch_line":"Short title and definitions","order_by":null,"url":"\/59.1-336\/"},{"id":63631,"section_number":"65.2-500","catch_line":"Compensation for total incapacity; computation of average wage; exclusion of AmeriCorps members, certain Food Stamp Employment and Training Program participants, and certain Temporary Assistance for Needy Families participants","order_by":null,"url":"\/65.2-500\/"}],"permalink":{"id":219905,"object_type":"law","relational_id":64853,"identifier":"40.1-28.7:8","token":"40.1\/3\/1\/40.1-28.7_8","url":"\/40.1-28.7_8\/","edition_id":1,"permalink":0,"preferred":1},"url":"\/40.1-28.7_8\/","token":"40.1\/3\/1\/40.1-28.7_8","dublin_core":{"Title":"Covenants not to compete prohibited; exceptions; civil penalty","Type":"Text","Format":"text\/html","Identifier":"\u00a7 40.1-28.7:8","Relation":"Code of Virginia"},"html":"\n\t\t\t\t\t\t

A.<\/span> As used in this section:\n\t\t\t“Covenant not to compete<\/span>” means a covenant or agreement, including a provision of a contract<\/span> of employment, between an employer<\/span> and employee that restrains, prohibits, or otherwise restricts an individual’s ability, following the termination of the individual’s employment, to compete with his former employer<\/span>. A “covenant not to compete<\/span>” shall not restrict an employee from providing a service to a customer or client of the employer<\/span> if the employee does not initiate contact with or solicit the customer or client.\n\t\t\t“Low-wage employee<\/span>” means an employee (i) whose average weekly earnings, calculated by dividing the employee’s earnings during the period of 52 weeks immediately preceding the date of termination of employment by 52, or if an employee worked fewer than 52 weeks, by the number of weeks that the employee was actually paid during the 52-week period, are less than the average weekly wage of the Commonwealth as determined pursuant to subsection B of § 65.2-500<\/a> or (ii) who, regardless of his average weekly earnings, is entitled to overtime compensation under the provisions of 29 U.S.C. § 207 for any hours worked in excess of 40 hours in any one workweek. “Low-wage employee<\/span>” includes interns, students, apprentices, or trainees employed, with or without pay, at a trade or occupation in order<\/span> to gain work or educational experience. “Low-wage employee<\/span>” also includes an individual who has independently contracted with another person to perform services independent of an employment relationship and who is compensated for such services by such person at an hourly rate that is less than the median hourly wage for the Commonwealth for all occupations as reported, for the preceding year, by the Bureau of Labor Statistics of the U.S. Department<\/span> of Labor. For the purposes of this section, “low-wage employee<\/span>” shall not include any employee whose earnings are derived, in whole or in predominant part, from sales commissions<\/span>, incentives, or bonuses paid to the employee by the employer<\/span>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

B.<\/span> No employer<\/span> shall enter into, enforce, or threaten to enforce a covenant not to compete<\/span> with any low-wage employee<\/span>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

C.<\/span> Nothing in this section shall serve to limit the creation or application of nondisclosure agreements intended to prohibit the taking, misappropriating, threatening to misappropriate, or sharing of certain information to which an employee has access, including trade secrets, as defined in § 59.1-336<\/a>, and proprietary or confidential information. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

D.<\/span> A low-wage employee<\/span> may bring a civil action<\/span> in a court<\/span> of competent jurisdiction<\/span> against any former employer<\/span> or other person that attempts to enforce a covenant not to compete<\/span> against such employee in violation of this section. An action under this section shall be brought within two years of the latter of (i) the date the covenant not to compete<\/span> was signed, (ii) the date the low-wage employee<\/span> learns of the covenant not to compete<\/span>, (iii) the date the employment relationship is terminated, or (iv) the date the employer<\/span> takes any step to enforce the covenant not to compete<\/span>. The court<\/span> shall have jurisdiction<\/span> to void any covenant not to compete<\/span> with a low-wage employee<\/span> and to order<\/span> all appropriate relief, including enjoining the conduct of any person or employer<\/span>, ordering payment of liquidated damages<\/span>, and awarding lost compensation, damages<\/span>, and reasonable attorney fees and costs. No employer<\/span> may discharge, threaten, or otherwise discriminate or retaliate against a low-wage employee<\/span> for bringing a civil action<\/span> pursuant to this section. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

E.<\/span> Any employer<\/span> that violates the provisions of subsection B as determined by the Commissioner<\/span> shall be subject to a civil penalty<\/span> of $10,000 for each violation. Civil penalties owed under this subsection shall be paid to the Commissioner<\/span> for deposit in the general fund. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

F.<\/span> If the court<\/span> finds a violation of the provisions of this section, the plaintiff<\/span> shall be entitled to recover reasonable costs, including costs and reasonable fees for expert witnesses, and attorney fees from the former employer<\/span> or other person who attempts to enforce an unlawful covenant not to compete<\/span> against such plaintiff<\/span>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

G.<\/span> Every employer<\/span> shall post a copy of this section or a summary approved by the Department<\/span> in the same location where other employee notices required by state or federal law<\/span> are posted. An employer<\/span> that fails to post a copy of this section or an approved summary of this section shall be issued by the Department<\/span> a written warning for the first violation, shall be subject to a civil penalty<\/span> not to exceed $250 for a second violation, and shall be subject to a civil penalty<\/span> not to exceed $1,000 for a third and each subsequent violation as determined by the Commissioner<\/span>. Civil penalties owed under this subsection shall be paid to the Commissioner<\/span> for deposit in the general fund.\n\t\t\tThe Commissioner<\/span> shall prescribe procedures for the payment of proposed assessments of penalties that are not contested by employers<\/span>. Such procedures shall include provisions for an employer<\/span> to consent to abatement of the alleged violation and to pay a proposed penalty<\/span> or a negotiated sum in lieu of such penalty<\/span> without admission of any civil liability arising from such alleged violation. <\/i><\/a><\/p><\/section>","plain_text":" CODE OF VIRGINIA\n\nCOVENANTS NOT TO COMPETE PROHIBITED; EXCEPTIONS; CIVIL PENALTY (\u00a7 40.1-28.7:8)\n\nA. As used in this section:\n\t\t\t“Covenant not to compete” means a covenant or agreement,\nincluding a provision of a contract of employment, between an employer and\nemployee that restrains, prohibits, or otherwise restricts an individual’s\nability, following the termination of the individual’s employment, to\ncompete with his former employer. A “covenant not to compete” shall\nnot restrict an employee from providing a service to a customer or client of the\nemployer if the employee does not initiate contact with or solicit the customer\nor client.\n\t\t\t“Low-wage employee” means an employee (i) whose average weekly\nearnings, calculated by dividing the employee’s earnings during the period\nof 52 weeks immediately preceding the date of termination of employment by 52,\nor if an employee worked fewer than 52 weeks, by the number of weeks that the\nemployee was actually paid during the 52-week period, are less than the average\nweekly wage of the Commonwealth as determined pursuant to subsection B of §\n65.2-500 or (ii) who, regardless of his average weekly earnings, is entitled to\novertime compensation under the provisions of 29 U.S.C. § 207 for any hours\nworked in excess of 40 hours in any one workweek. “Low-wage\nemployee” includes interns, students, apprentices, or trainees employed,\nwith or without pay, at a trade or occupation in order to gain work or\neducational experience. “Low-wage employee” also includes an\nindividual who has independently contracted with another person to perform\nservices independent of an employment relationship and who is compensated for\nsuch services by such person at an hourly rate that is less than the median\nhourly wage for the Commonwealth for all occupations as reported, for the\npreceding year, by the Bureau of Labor Statistics of the U.S. Department of\nLabor. For the purposes of this section, “low-wage employee” shall\nnot include any employee whose earnings are derived, in whole or in predominant\npart, from sales commissions, incentives, or bonuses paid to the employee by the\nemployer.\n\nB. No employer shall enter into, enforce, or threaten to enforce a covenant not\nto compete with any low-wage employee.\n\nC. Nothing in this section shall serve to limit the creation or application of\nnondisclosure agreements intended to prohibit the taking, misappropriating,\nthreatening to misappropriate, or sharing of certain information to which an\nemployee has access, including trade secrets, as defined in § 59.1-336, and\nproprietary or confidential information.\n\nD. A low-wage employee may bring a civil action in a court of competent\njurisdiction against any former employer or other person that attempts to\nenforce a covenant not to compete against such employee in violation of this\nsection. An action under this section shall be brought within two years of the\nlatter of (i) the date the covenant not to compete was signed, (ii) the date the\nlow-wage employee learns of the covenant not to compete, (iii) the date the\nemployment relationship is terminated, or (iv) the date the employer takes any\nstep to enforce the covenant not to compete. The court shall have jurisdiction\nto void any covenant not to compete with a low-wage employee and to order all\nappropriate relief, including enjoining the conduct of any person or employer,\nordering payment of liquidated damages, and awarding lost compensation, damages,\nand reasonable attorney fees and costs. No employer may discharge, threaten, or\notherwise discriminate or retaliate against a low-wage employee for bringing a\ncivil action pursuant to this section.\n\nE. Any employer that violates the provisions of subsection B as determined by\nthe Commissioner shall be subject to a civil penalty of $10,000 for each\nviolation. Civil penalties owed under this subsection shall be paid to the\nCommissioner for deposit in the general fund.\n\nF. If the court finds a violation of the provisions of this section, the\nplaintiff shall be entitled to recover reasonable costs, including costs and\nreasonable fees for expert witnesses, and attorney fees from the former employer\nor other person who attempts to enforce an unlawful covenant not to compete\nagainst such plaintiff.\n\nG. Every employer shall post a copy of this section or a summary approved by the\nDepartment in the same location where other employee notices required by state\nor federal law are posted. An employer that fails to post a copy of this section\nor an approved summary of this section shall be issued by the Department a\nwritten warning for the first violation, shall be subject to a civil penalty not\nto exceed $250 for a second violation, and shall be subject to a civil penalty\nnot to exceed $1,000 for a third and each subsequent violation as determined by\nthe Commissioner. Civil penalties owed under this subsection shall be paid to\nthe Commissioner for deposit in the general fund.\n\t\t\tThe Commissioner shall prescribe procedures for the payment of proposed\nassessments of penalties that are not contested by employers. Such procedures\nshall include provisions for an employer to consent to abatement of the alleged\nviolation and to pay a proposed penalty or a negotiated sum in lieu of such\npenalty without admission of any civil liability arising from such alleged\nviolation.\n\nHISTORY: 2020, cc. 948, 949, \u00a7 40.1-28.7:7; 2025, c. 585.","edition":{"id":1,"name":"2025","slug":"2025","date_created":"2026-06-21 22:39:22","date_modified":"2026-06-21 22:39:22","current":1,"order_by":1,"last_import":null}}