{"id":3069,"date":"2023-05-26T17:17:11","date_gmt":"2023-05-26T21:17:11","guid":{"rendered":"http:\/\/blog.tarleyrobinson.com\/?p=3069"},"modified":"2023-05-26T17:17:11","modified_gmt":"2023-05-26T21:17:11","slug":"virginias-new-noncompete-statute-effective-july-1","status":"publish","type":"post","link":"https:\/\/blog.tarleyrobinson.com\/?p=3069","title":{"rendered":"Virginia’s Noncompete Statute"},"content":{"rendered":"\n

Virginia became one of the latest states to pass legislation limiting the use of employee noncompete agreements. Beginning July 1, 2020, certain noncompete agreements are prohibited by statute<\/a>. This blog post examines that statute and what it means for employers and employees.<\/p>\n\n\n

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The\nstatute states that \u201cNo employer shall enter into, enforce, or threaten to\nenforce a covenant not to compete with any low-wage employee.\u201d The statute\ndefines \u201clow-wage employee\u201d as follows:<\/p>\n\n\n\n

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“Low-wage employee” means an employee whose average weekly earnings . . .  are less than the average weekly wage of the Commonwealth as determined pursuant to subsection B of \u00a765.2-500. . . . “[L]ow-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.<\/p>\n<\/blockquote>\n\n\n\n

The\nterm \u201clow-wage employee\u201d does not mean \u201cminimum wage\u201d for example, because\ncurrently the \u201caverage weekly wage of the Commonwealth\u201d is over $1,000\nper week<\/a>, or $52,000 per year. However, if an employee is paid that amount\nor less, but is paid \u201cpredominantly\u201d from sales commissions, incentives, or\nbonuses, that employee is not a \u201clow-wage employee\u201d and the \u201cnoncompete\u201d\nrestriction does not apply.<\/p>\n\n\n\n

If\nan employer enters into a noncompete agreement with a \u201clow-wage employee\u201d on or\nafter July 1, 2020, that agreement cannot be enforced or even threatened to be\nenforced. Otherwise, a low-wage employee may bring a lawsuit against that\nformer employer. The remedy for a successful case brought by the employee could\ninclude \u201cpayment of liquidated damages, and awarding lost compensation,\ndamages, and reasonable attorney fees and costs.\u201d Additionally, the law imposes\na $10,000 civil penalty per violation. Employers are required to \u201cpost a copy\nof this section or a summary approved by the Department in the same location\nwhere other employee notices required by state or federal law are posted.\u201d <\/p>\n\n\n\n

However, the statute permits certain employee agreements. \u201cNondisclosure\u201d agreements are permitted to the extent they \u201cprohibit the taking, misappropriating, threatening to misappropriate, or sharing of certain information, including trade secrets.\u201d Further, a non-solicitation agreement is permitted so long as the agreement \u201cshall 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<\/em><\/strong>.\u201d I would expect that provision to be open to interpretation on the issue of whether the former employee \u201cinitiated contact.\u201d Consequently, it is important for employers to take another look at their noncompete agreements, because the rules changed beginning July 1, 2020. The law does not apply retroactively, so any noncompete agreements that predate July 1, 2020 are not affected. <\/p>\n","protected":false},"excerpt":{"rendered":"

Virginia became one of the latest states to pass legislation limiting the use of employee noncompete agreements. Beginning July 1, 2020, certain noncompete agreements are prohibited by statute. This blog post examines that new statute and what it means for employers and employees.<\/p>\n","protected":false},"author":5,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"footnotes":""},"categories":[336,6,247,1,23],"tags":[123,289,143,178],"_links":{"self":[{"href":"https:\/\/blog.tarleyrobinson.com\/index.php?rest_route=\/wp\/v2\/posts\/3069"}],"collection":[{"href":"https:\/\/blog.tarleyrobinson.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.tarleyrobinson.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.tarleyrobinson.com\/index.php?rest_route=\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.tarleyrobinson.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=3069"}],"version-history":[{"count":7,"href":"https:\/\/blog.tarleyrobinson.com\/index.php?rest_route=\/wp\/v2\/posts\/3069\/revisions"}],"predecessor-version":[{"id":3121,"href":"https:\/\/blog.tarleyrobinson.com\/index.php?rest_route=\/wp\/v2\/posts\/3069\/revisions\/3121"}],"wp:attachment":[{"href":"https:\/\/blog.tarleyrobinson.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=3069"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.tarleyrobinson.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=3069"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.tarleyrobinson.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=3069"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}