Effective July 1, 2025, Virginia has amended its non-compete law to prohibit employers from entering into non-competition agreements with non-exempt employees.

The statute previously prohibited employers in Virginia from entering into non-competition agreements with “low-wage employee[s].”  A “low-wage employee” was previously defined as any employee whose average weekly earnings fell below the Virginia average weekly wage, which for 2025 is $1,463.10 per week or $76,081 annually.

The amendment has now expanded the definition of “low-wage employee” to include, not only those who earn less than the average weekly wage, but also any employee who, regardless of their average weekly earnings, is entitled to overtime compensation under the federal Fair Labor Standards Act (“FLSA”).  In other words, the statute now prohibits Virginia employers from entering into non-competition agreements with any employee who earns less than the average weekly wage or who is non-exempt under the FLSA.  The amendment is not retroactive, which means that existing non-compete agreements are still valid. 

The statute continues to allow employees to bring a private right of action to recover liquidated damages, lost compensation, and attorneys’ fees, and employers are also subject to a civil penalty of $10,000 for each violation of the statute.

Retail employers in Virginia should revisit their non-competition agreement practices in light of these recent changes.