On March 4, 2026, Virginia Senate Bill 170 (SB170) passed the House of Delegates after unanimous approval by the Senate. SB170 now awaits signature by Governor Abigail Spanberger, who has until April 13, 2026 to act. If signed, the law will go into effect on July 1, 2026, and forms part of Virginia’s broader effort to limit the application and enforceability of non-compete agreements.
SB170 provides greater protections for employees who are involuntarily terminated. Under the bill, if an employee subject to a non-compete is fired without cause, the agreement is unenforceable unless the employer provides severance pay or another form of monetary compensation. However, if the employee is fired “for cause,” the non-compete agreement is enforceable. The proposed law also requires employers to disclose any severance benefits or payments at the time the non-compete agreement is executed.
This bill is part of a wider push to restrict non-compete agreements in the Commonwealth. In 2020, lawmakers amended Va. Code § 40.1-28.7:8 to prohibit non-compete agreements with “low-wage” employees—defined in 2026 as those earning less than $1,507.01 per week. As we previously reported, the statute was amended again in 2025, which expanded Virginia’s restrictions to prohibit non-compete agreements with non-exempt employees.
If SB170 is signed into law, Virginia employers should review their non-compete agreements with counsel before July 1, 2026, to ensure compliance with the new requirements.
