Non-Compete Agreements

As a reminder, Virginia is one of eleven states (along with Washington, D.C.) that imposes restrictions on the use of non-compete agreements for so-called “low wage employees.” Effective now in 2025, the salary threshold defining a “low wage employee” in Virginia has increased from $73,320 to $76,081 annually. This adjustment reflects changes to the state’s Average Weekly Wage, as determined by the Virginia Department of Labor and Industry (DOLI). Employers should take note of this updated threshold to ensure compliance with Virginia law regarding non-compete agreements. For a deeper understanding of the “low wage” salary restrictions and how the annual […]

Article originally published by Valley Business Front in Issue 193, October 2024: Valley Business FRONT, Issue 193, October 2024. In the 35 years that I have represented Virginia businesses and executives in workplace matters and litigation, I have lost count as to the number of times I have heard someone say words to the effect that non-compete agreements are “unlawful” in Virginia. (Spoiler alert: they can be lawful.) This article provides answers, and an update. As a General Statement, Non-Compete Agreements may be Valid in Virginia if Narrowly Tailored to Prevent Direct Competition. It is true that restraints against competition […]

On Tuesday, August 20, 2024, U.S. District Court Judge Ada E. Brown ruled that the FTC’s Final Rule banning non-compete agreements (the “Rule”), which was set to take effect on September 4, 2024, was “promulgated . . . in excess of [the FTC’s] statutory authority.”  Ryan LLC, v. Federal Trade Commission, 3:24-cv-00986-E (N.D. Tex. 2024). As a result, the Court held that, consistent with Administrative Procedure Act (“APA”) § 706(2)(A)-(C), the Rule would be “set aside.” Critically, the Court concluded, based on “a couple of recent cases,” that “setting aside agency action under § 706 has ‘nationwide effect,’ is ‘not […]

Article co-written by Ryan Starks, David Paxton, and Summer Associate Haley Leipzig On April 23, 2024, the Federal Trade Commission (“FTC”) issued a Final Rule (the “Rule”) that will enact a “comprehensive ban on non-competes with all workers” as of September 4, 2024.[1]  The Rule aims to prohibit employers from using or enforcing non-compete agreements with employees or independent contractors when their employment ends, in order to address what the FTC deems “unfair methods of restricting competition.”[2]  The full text of the Rule can be accessed here.[3]. If the FTC rule becomes effective, it will supersede and supplant Virginia law […]

As of July 1, 2020, Virginia became one of twelve (12) states that imposed a ban  on the use of non-compete agreements for “low wage employees.”[1] At the time of adoption, the salary threshold for a “low wage employee” was $59,124 annually (or $1,137 per week). This salary threshold was not fixed by statute, but instead, the General Assembly adopted a moving target definition that ties the “low wage” salary threshold to the “average weekly wage of the Commonwealth” as determined by the Virginia Employment Commission. The practical effect is that a new average weekly wage is calculated before or […]