What I learned from my partner Dan Frith on Virginia’s New Non-Compete law

Elections have consequences.

Last year, Virginia’s General Assembly was mostly blue for the first time in decades. Laws were passed that protect WORKERS not COMPANIES.

One of these laws, is a total change on how Virginia handles Non-Compete agreements.

I have likely written 100 blog posts, podcasts and articles on Virginia Non-Compete law. Heck, we even wrote a book (like an actual book with pages). THROW IT ALL OUT THE WINDOW – IF, you make less than $59,000 ish a year. If you make more – read my old blogs.

This week my partner Dan taught a CLE to Virginia lawyers (CLE = continuing legal education class) on the new law, and I am awfully glad he did. I learned allot including the following:

1. You should always read the actual statute
   

   § 40.1-28.7:8. Covenants not to compete prohibited as to low-wage employees; civil penalty

   – so here it is for your reading pleasure:  

2. When you read it, pay attention. For example, this law says
   1. If your boss makes you sign one, and you make less than $59,000 ish you can sue your boss
   2. And when you sue your boss, you can ask for attorneys fees and costs
   3. and your boss has to pay $10,000 penalty
   4. And your boss has to post this new law: “Every employer shall post a copy of this section or a summary approved by the Department in the same location where other employee notices required by state or federal law are posted. An employer that fails to post a copy of this section or an approved summary of this section shall be issued by the Department a written warning for the first violation, shall be subject to a civil penalty not to exceed $250 for a second violation, and shall be subject to a civil penalty not to exceed $1,000 for a third and each subsequent violation as determined by the Commissioner. Civil penalties owed under this subsection shall be paid to the Commissioner for deposit in the general fund.”
   5. Oddly, this posting thing isn’t just limited to bosses who ask employees to sign non-competes.
   6. If you are made to sign one, you have two years AFTER you signed it, to sue!

In sum – we now have two classes of employees in Virginia, starting July 1, 2020.

Those who make less than $59,000 who can’t be bound by a Non-Compete, and those who make more, and can be.

It is a step in the right direction. And please note, it doesn’t apply to Severance Agreements – or non-poaching agreements (which address hiring away other employees).

Thank you Dan, for the illuminating CLE.

And thanks to the General Assembly for putting workers first. Also, as an aside – I would just like to remind the member of the GA who told me years ago “Virginia will never expand Medicaid and Virginia will never vote to limit non-compete agreements, just stop trying” that thankfully, he was wrong. We kept trying!