Bill > SB569

This bill, effective July 1, 2026, prohibits employers from enforcing a "covenant not to compete" – an agreement that restricts an employee's ability to work for a competitor after leaving their job – if the employee is "involuntarily separated" from employment. "Involuntarily separated" is defined as being terminated, laid off, discharged, or otherwise released from employment for reasons not related to the employee's poor job performance or misconduct, and it specifically excludes voluntary resignations. The bill establishes a presumption that an employee is involuntarily separated unless the employer can provide documentation proving the separation was voluntary or due to the employee's inadequate performance or misconduct. This change builds upon existing law that already restricts such covenants for "low-wage employees," a term defined by earnings thresholds or entitlement to overtime pay. The bill also clarifies that it does not affect agreements made before July 1, 2026, and maintains provisions for employees to bring civil actions against employers who attempt to enforce unlawful covenants, including the recovery of damages and attorney fees.

Business and Industry

https://lis.virginia.gov/bill-details/20261/SB569