Virginia Passes Bill Limiting Noncompete Enforceability for Terminated Employees

New law requires severance pay for enforcing noncompetes after no-cause terminations

Mar. 30, 2026 at 1:00pm

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A high-end, photorealistic studio still-life photograph featuring a stack of crisp legal documents, a pen, and a pair of handcuffs arranged elegantly on a clean, monochromatic background, symbolizing the abstract corporate strategy and legal implications of noncompete agreements.The new Virginia law aims to limit the coercive use of noncompete agreements that have restricted worker mobility and competition.Alexandria Today

The Virginia Senate has passed a bill that limits the enforceability of noncompete agreements for employees who are terminated without cause or severance benefits. Senate Bill 170 adds a new subsection to state law stating that a noncompete is not enforceable if an employer discharges an employee without providing severance, unless the termination is for cause. The bill also allows employees to file civil lawsuits against former employers who violate the new provisions, and imposes a $10,000 civil penalty per violation.

Why it matters

This legislation continues a broader trend of states and the federal government moving to restrict the use of noncompete agreements, which critics say employers have used unfairly to limit worker mobility and competition. The new Virginia law significantly expands employee protections by applying broadly to all workers, not just low-wage earners, and requiring employers to pay severance if they want to enforce noncompetes after no-cause terminations.

The details

Senate Bill 170 was sponsored by Democratic Sen. Jeremy McPike and Republican Sen. Glen Sturtevant Jr. It passed the Virginia Senate and House with broad bipartisan support. The law will require employers to disclose any severance benefits when an employee signs a noncompete agreement. If an employer terminates a worker without cause, they must provide severance pay in order to enforce the noncompete, unless the termination is 'for cause.' Employees will also be able to file civil lawsuits against former employers who violate the new provisions, and employers face a $10,000 civil penalty per violation.

  • Senate Bill 170 passed the Virginia Senate unanimously on February 6, 2026.
  • The bill passed the Virginia House of Delegates on an 87-12 vote on March 4, 2026.
  • If signed by Gov. Abigail Spanberger, the law will take effect on July 1, 2026.

The players

Sen. Jeremy McPike

A Democratic state senator from Woodbridge who sponsored Senate Bill 170.

Sen. Glen Sturtevant Jr.

A Republican state senator from Chesterfield County who incorporated his own similar bill, SB 569, into the final version of SB 170.

Gov. Abigail Spanberger

The governor of Virginia who has until April 13 to sign or veto Senate Bill 170.

Declan Leonard

An employment law attorney at Berenzweig Leonard in McLean, Virginia who says the new law would be a 'seismic development' in the state.

Tom Spiggle

The founder of The Spiggle Law Firm in Alexandria, Virginia who called the bill a 'massive win for Virginia workers.'

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What they’re saying

“The problem that we're solving is with the constituents who have been terminated, not for cause but for reduction in force or [without cause], but they all still had a noncompete in place. So, they're essentially out in the street.”

— Sen. Jeremy McPike, State Senator

“SB 170 would be a seismic development in Virginia employment law and would continue the trend started in the summer of 2020 in which Virginia is being made into an employee-friendly state.”

— Declan Leonard, Employment Law Attorney, Berenzweig Leonard

“For years, employers have used noncompetes coercively — firing employees without cause yet still weaponizing these agreements to lock them out of their industry.”

— Tom Spiggle, Founder, The Spiggle Law Firm

What’s next

If signed by Gov. Spanberger, the new law will take effect on July 1, 2026 and apply to all noncompete agreements entered into after that date.

The takeaway

This legislation represents a significant shift in Virginia employment law, dramatically expanding protections for workers by limiting the enforceability of noncompete agreements unless employers provide severance pay after no-cause terminations. The law is part of a broader national trend toward restricting the use of noncompetes, which critics say have been abused by companies to unfairly restrict worker mobility and competition.