Virginia Law On Non-Compete Agreements

While each state has its own test to determine whether a non-compete clause is applicable, it is often the same question: Is the restriction reasonable? Non-competitive agreements include both non-competition and non-appeal agreements between companies and their employees or contractors. Non-compete clauses (or “non-competition clauses”) generally limit a former employee`s ability to join a competitor for a specified period after the former employer`s departure, and the non-registration provisions (often considered a non-compete clause) limit a former employee to solicit the activity from former employer`s clients or to solicit employees from the former employer to leave the company. Financial relief may include legal fees, loss of profits and liquidated damages (these are pre-defined damages defined in the non-competition agreement, but not all non-competition agreements will have a liquidation clause). Senate Act 480 defines “low-wage workers” as workers whose average weekly wage over the past 52 weeks is “below the commonwealth average weekly wage,” as calculated under VA 65.2-500 (b). According to the most recent data from the Virginia Employment Commission (“VEC”), the average weekly wage is $1,204, which would be equivalent to about $62,600 per year and could cover about half of the workforce in Virginia. However, it is important to note that the VEC recalculates each quarter. Therefore, a non-competition agreement, which would otherwise be applicable under this new law if it is registered, could not be applicable in the event of an average wage increase. Employers are not allowed to discriminate against low-wage workers or take revenge when they take legal action against a non-compete agreement under the new law. Employers also need a copy of the law or summary that have been approved by va Department of Labor and Industry (such a summary has not been published). Although employers receive a written warning, non-compliance with the posting requirement can result in civil fines of up to $1,000.