Table of Contents
• What is Virginia’s New Non-Compete Law (SB 170)?
• Does This Apply to All Employees?
• What If I Was Fired “For Cause”?
• When Does This Law Take Effect?
• What This Means for Virginia Employees
• Contact an Employment Lawyer
Virginia has passed a groundbreaking new law that will dramatically shift the balance of power in non-compete agreements. The law, Senate Bill 170, has passed the General Assembly and is expected to be signed by the Governor. Its core provision is simple but revolutionary: if an employer fires you without paying severance, your non-compete agreement is no longer enforceable.
This change fundamentally alters the landscape for any employee in Virginia who has signed a non-compete agreement.
What is Virginia’s New Non-Compete Law (SB 170)?
For years, employers have used non-compete agreements to restrict an employee’s ability to work for a competitor, even after firing them. SB 170 puts a stop to this practice. The law ties the enforceability of a non-compete directly to the payment of severance.
Under the new law, an employer who wants to enforce a non-compete against a terminated employee must be willing to pay for that privilege. If they choose not to provide a severance package, the non-compete becomes void.
This creates a powerful economic incentive for fairness. Employers can no longer have it both ways—they cannot cut an employee loose without financial support and simultaneously prevent them from earning a living elsewhere.
Does This Apply to All Employees?
Yes. Unlike Virginia’s 2020 law, which banned non-competes only for
low-wage workers, SB 170 applies to all employees regardless of their income level. A high-earning executive is protected in the same way as an entry-level employee. The only factor is whether the employee was terminated and whether severance was paid.
What If I Was Fired “For Cause”?
The law states that employees fired “without cause” are protected. It does not define “cause,” which means courts will likely rely on existing legal interpretations. Generally, “for cause” implies a termination due to serious misconduct, such as theft, fraud, or a major violation of company policy. A layoff, a termination for performance reasons, or a simple “at-will” termination would almost certainly not be considered “for cause,” meaning the non-compete would be unenforceable without severance.
When Does This Law Take Effect?
The law is slated to take effect on July 1, 2026, and will apply to non-compete agreements signed on or after that date.
What This Means for Virginia Employees
This is one of the most significant pro-employee changes to Virginia employment law in decades. If you have a non-compete agreement, your rights have been dramatically strengthened:
•You Cannot Be Locked Out and Left with Nothing: If your employer decides to terminate your employment, they must make a choice: pay you severance or release you from your non-compete. They can no longer do both.
•Increased Leverage: This law gives you significant leverage in severance negotiations. You can now bargain for a fair severance package in exchange for agreeing to abide by the non-compete.
•Freedom to Work: If you are laid off or fired without severance, you are free to seek new employment without the fear of being sued by your former employer over your non-compete.
Contact an Employment Lawyer
Non-compete law is complex, and the passage of SB 170 will create new legal questions. If you have been fired and have a non-compete agreement, or if you are being asked to sign a new one, you should speak with an experienced Virginia employment lawyer.
Contact us today to tell us about your case.
References
[1] Parker Poe. (2026, March 13). Virginia Bill Limits Employee Noncompetes. Retrieved from
