Virginia Enacted New Noncompete Law

Governor Abigail Spanberger signed SB170, requiring severance for noncompete enforcement.

Updated on Oct. 13, 2026 in Jobs — General

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Should employers be required to provide severance pay to enforce employee noncompete agreements?

Governor Abigail Spanberger signed SB170 into law, which mandates that noncompete agreements in Virginia remain unenforceable if an employee is terminated without cause without severance. This regulation, which took effect on July 1, 2026, aims to reform how restrictive covenants function across the state.

Why it matters

The legislation ensures that employees are not unfairly restricted from future employment opportunities if their current company ends their contract without a clear cause. By requiring severance disclosures at the time of signing, the law provides workers with greater transparency regarding their job security.

Violations of the statute may trigger civil penalties reaching $10,000 per instance. Employers who repeatedly fail to post the required workplace notice face penalties up to $1,000.

The players

Abigail Spanberger

Abigail Spanberger is the Governor of Virginia who signed the SB170 legislation into law.

The details

Under the new law, employers must disclose severance benefits within the initial restrictive covenant agreement to keep the noncompete clause enforceable. Employers are also required to display a copy of the statute or an approved summary in their workplace to maintain compliance.

July 1, 2026: The law became effective for agreements entered into, amended, or renewed.

Market Landscape

This legislation aligns with a growing national movement to limit the scope of restrictive employment covenants. It positions Virginia alongside other states that are actively curbing the enforceability of agreements that traditionally limited labor mobility.

Employees can now expect clearer disclosure of severance benefits if their employment contract includes a noncompete clause. If terminated without cause, workers may be entitled to seek damages, lost compensation, and attorneys' fees if their former employer failed to meet these new statutory requirements.

The takeaway

Workers should review any noncompete agreements signed or renewed after July 1, 2026, to ensure they include explicit severance disclosures. Understanding your rights regarding these clauses is essential for protecting your career mobility if your employment is terminated.