I, Lauren Ellerman, can tell the future:
For years I have been telling the medical providers who hire me to review their Virginia employment contracts and non-compete agreements “In your professional lifetime, you will likely see the law on non-competes change in Virginia.” I then explain how non-competes are political. The more the state leans Blue, the more likely non-compete laws will be changed.
I have not been able to play the role of soothsayer or fortune teller with the same confidence to my clients who are in sales, contracting, building, etc. Just the health care providers. Why did I know the day would come when Virginia would enact legislation to prohibit non-compete agreements for most healthcare providers? Because most other progressive states have started chipping away at restrictive covenants by starting with low wage workers, then adding the prohibition for healthcare providers. The political argument is that we that people should get to chose who our healthcare providers are, not these huge for profit companies or private equity firms that buy out small physician practices.
Virginia law changes to prohibit Non Competes for most (not all) healthcare providers
Well, for once I saw the future for what it was. Starting next week – July 1, 2026 – no one licensed by or “certified by the Board of Medicine, Nursing, Counseling, Optometry, Psychology, or Social Work” can be asked to sign a non-compete in Virginia.
If they are asked, they may “bring a civil action in a court of competent jurisdiction against any former employer or other person that attempts to enforce a covenant not to compete against such employee in violation of this section. An action under this section shall be brought within two years of the latter of (i) the date the covenant not to compete was signed, (ii) the date the low-wage employee or health care professional learns of the covenant not to compete, (iii) the date the employment relationship is terminated, or (iv) the date the employer takes any step to enforce the covenant not to compete. The court shall have jurisdiction to void any covenant not to compete with a low-wage employee or health care professional and to order all appropriate relief, including enjoining the conduct of any person or employer, ordering payment of liquidated damages, and awarding lost compensation, damages, and reasonable attorney fees and costs. No employer may discharge, threaten, or otherwise discriminate or retaliate against a low-wage employee or health care professional for bringing a civil action pursuant to this section.
In addition – and this is my single favorite part: “Any employer that violates the provisions of subsection B as determined by the Commissioner shall be subject to a civil penalty of $10,000 for each violation. Civil penalties owed under this subsection shall be paid to the Commissioner for deposit in the general fund.”
So what if you signed a contract before July 1, 2026?
While the statute does not directly relate to anyone who signed a contract before 7.1.26 – it does help everyone (in the definition of healthcare provider) because when your contract is renewed, the new one won’t have a non compete. Also, the way Courts determine if non-competes are valid, enforceable, narrowly tailored etc… will be impacted by this new law.
For example, small family care practice has 6 providers. 3 new hires don’t have non competes. Old gals do have non-compete. How is the practice going to prove they have a “legitimite business interest preventing Dr. Sheila from getting a job 13 miles away when Dr. Gwen is allowed to do the same by right?” It sure helps argue the non-compete is overbroad and unduly burdensome when it only applies to some, not all of the doctors.
In sum, while it isn’t a 100% get out of jail for free card, it is an Ace in the sleeve (if you don’t mind hiring a lawyer and going to court).
What if your type of health professional is not listed in the definition?
This is a trickier question to answer. I am guessing the General Assembly forgot there are a bunch of people in hospitals and medical buildings who are not licensed by the BOM / BON etc. Like speech, occupational, physical therapists, radiologic technologists, pharmacists, chiropractors, respiratory therapists etc… not to mention doctors who care for animals not humans. (Hello Veternarians). And while some of those professions may be covered by the low wage employee rules, not all are.
Do I think this was on purpose? Nope. I don’t. I think politicians start where they can and baby step into fulsome legislation. I hope, they will remedy this by next year including all the other Boards at issue. I hope we will be so bold as to prohibit non competes for all Virginians (but for the sale of a business). I think they harm families, prevent invention and entrepreneurship and I think they can be a little mean.
In sum – this is a good law. A good change, but not complete, at least not yet.
If you need your employment contract and non-compete reviewed under Virginia law – call me, or my partners. We review these all the time and can help you make the right choices when signning an initial contract or transitioning somewhere new.