Trade Secrets & Employee Mobility

At the end of March, Governor Glenn Youngkin signed SB 1218, which amends Virginia’s non-compete ban for “low-wage” workers (the “Act”) to include non-exempt employees under the federal Fair Labor Standards Act (the “FLSA”). The expanded restrictions take effect July 1, 2025.

What’s New?

As we discussed in more detail here, since July 2020, the Act has prohibited Virginia employers from entering into, or enforcing, non-competes with low-wage employees. Prior to the amendment, the Act defined “low-wage employees” as workers whose average weekly earnings were less than the average weekly wage of Virginia, which fluctuates annually and is determined by the Virginia Employment Commission. In 2025, Virginia’s average weekly wage is $1,463.10 per week, or approximately $76,081 annually. “Low-wage employees” also include interns, students, apprentices, trainees, and independent contractors compensated at an hourly rate that is less than Virginia’s median hourly wage for all occupations for the preceding year, as reported by the U.S. Bureau of Labor Statistics. However, employees whose compensation is derived “in whole or in predominant part” from sales commissions, incentives or bonuses are not covered by the law.

Several states over the past few years have passed legislation prohibiting the use in noncompete agreements (and other employment-related agreements) of out-of-state choice-of-law and forum selection provisions. A few of these states’ laws include enforcement mechanisms with stringent penalties, such as California, which provides for injunctive relief and attorneys’ fees to an aggrieved employee; Washington, which entitles aggrieved employees to actual damages or statutory penalties of $5,000, as well as their attorneys’ fees; and, beginning in August, Colorado, where any violation of that state’s noncompete statute (including the prohibition on out-of-state choice-of-law and forum selection provisions) could lead to civil and criminal penalties.

Non-compete agreements may all but disappear from the Washington, D.C. employment landscape in 2021.  On December 15, 2020, the District of Columbia Council voted 12-0 to approve the Ban on Non-Compete Agreements Amendment Act of 2020 (B23-0494) (the “Bill”), which would prohibit the use and enforcement of non-compete agreements for all employees except certain highly paid physicians.  If enacted into law, Washington, D.C. will have adopted a much stricter policy than several other states  that have recently restricted the use of non-compete agreements—including its ...

Virginia may be for lovers, but it no longer loves non-compete agreements.  Starting on July 1, 2020, employers may not “enter into, enforce, or threaten to enforce” a non-compete agreement with any “low-wage employee.”  As previously reported, this law is just one of the many new employment laws enacted during the 2020 legislative session.

Who Qualifies as a “Low-Wage” Employee?

Senate Bill 480 defines “low-wage employee” as a worker whose average weekly earnings during the previous 52 weeks “are less than the average weekly wage of the Commonwealth” as ...