Virginia Non-Compete Agreements: What Employers and Employees Need to Know

 Posted on May 05, 2025 in Business

At Fox & Moghul, we are Virginia’s top business and employment attorneys, specializing in non-compete agreements and restrictive covenants. Whether you are an employer seeking to protect trade secrets or an employee fighting an overbroad restriction, our legal team has extensive experience in drafting, negotiating, and litigating non-compete agreements across Fairfax, Arlington, Loudoun, Prince William, and Alexandria.

This guide covers everything you need to know about Virginia non-compete agreements, including key case law, enforceability standards, and common pitfalls.

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What Is a Non-Compete Agreement?

A non-compete agreement (also known as a covenant not to compete) is a contractual restriction that prohibits an individual from working in a specific field or geographic area after leaving a company. Employers use non-competes to protect confidential information, trade secrets, and client relationships from competitors.

Common Uses of Non-Competes in Virginia:
✔️ Preventing former employees from working for direct competitors
✔️ Restricting contractors or partners from soliciting clients
✔️ Protecting proprietary business practices from being used by competitors

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Virginia Law: Enforceability of Non-Compete Agreements

Virginia law strictly scrutinizes non-compete agreements. Courts disfavor overly broad restrictions and require employers to prove that the agreement is specifically intended to address competition and protect the interests of an employer.

Three-Part Test for Non-Compete Agreements in Virginia

Virginia courts analyze three key factors to determine whether a non-compete agreement is enforceable:

1️⃣ Does the non-compete protect a legitimate business interest?

• Examples: Client relationships, confidential data, trade secrets
  2️⃣ Is the restriction no greater than would be needed to protect the business?

• Courts consider scope of work restrictions, geographic limitations, and duration
  3️⃣ Is the agreement unduly harsh or against public policy?

• A restriction that prevents someone from earning a livelihood may be invalid

Key Case Law:

• Paramount Termite Control v. Rector, 238 Va. 171, 174 (1989) – A non-compete must protect a legitimate business interest without being unreasonably restrictive.

• New River Media Group, Inc. v. Knighton, 245 Va. 367, 369 (1993) – Courts balance the employer’s need for protection with the employee’s right to work.

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Key Elements of an Enforceable Non-Compete in Virginia

1. Duration – How Long Can a Non-Compete Last?

• Virginia courts generally enforce non-competes lasting 6 months to 2 years

• Restrictions longer than 2 years are rarely upheld

Case Law:

• James Ltd. v. Saks Fifth Ave., Inc., 67 Va. Cir. 126 (Arlington, 2005) (a non-compete agreement that lasted for three years within a one-mile radius was upheld) 

• Simmons v. Miller, 261 Va. 561, 544 S.E.2d 666 (2001) (a non-compete agreement that lasted for three years was found to last longer than was necessary due to a failure to explain what types of work the person was restricted from performing. It merely states that "Employee shall not directly or indirectly, own, manage, control, be employed by, participate in, or be connected in any manner with ownership, management, operation, or control of nay business similar to the type of business conducted by Employer…" 

• Management Concepts, Inc. v. Kraemer, No. 1822547 (Fairfax Cir. Ct. Apr. 26, 2004) (an agreement that lasted for two years in which independent contractors were restricted from providing services to a former client's customers found to be reasonable)

• Anteon Corp. v. BTG Inc., 62 Va. Cir. 41 (Fairfax 2003) (after an arbitrator prevented a contractor from soliciting employees who worked for a subcontractor, an appeal found that this restriction went against Virginia public policy because it was permanent)

• Home Paramount Pest Control Cos. v. Shaffer, 282 Va. 412, 418, 718 S.E.2d (2011) (a non-compete agreement was found to be too broad due to its restrictions against any involvement in businesses involving pest control, including making a passive investment).

2. Geographic Scope – Where Can a Non-Compete Apply?

• Local restrictions (city, county, state) are more enforceable

• Nationwide or global restrictions are rarely upheld

Case Law:

• Advanced Marine Enterprises, Inc. v. PRC, Inc., 256 Va. 106 (1998) – A 50-mile restriction was reasonable

• New River Media Group, Inc. v. Knighton, 245 Va. 367 (1993) – A 60-mile, one-year restriction was enforceable

3. Restricted Activities – What Can Employees Be Barred From Doing?

A non-compete must be specific in defining what type of work, industry, or business activity is restricted.

Case Law:

• Modern Environments, Inc. v. Stinnett, 263 Va. 491 (2002) (a restrictive covenant was found to be invalid due to its failure to detail what types of work a former employee was prevented from performing)

• Roanoke Eng’g Sales Co. v. Rosenbaum, 223 Va. 548, 553 (1982) (a non-competition covenant was found to be valid because the employment restriction was limited to activities similar to business conducted by former employer)

• Blue Ridge Anesthesia & Critical Care, Inc. v. Gidick, 239 Va. 369 (1990) (in a non-compete agreement for a medical equipment vendor, a provision that prohibited employees from being employed by a competitor providing similar types of services was upheld. That provision included explicit language allowing employees to be employed by other medical providers that did not compete with the former employer, and the court noted that employees would only be prohibited from performing work that would compete with the former employer's business.)

• Omniplex World Servs. Corp. v. US Investigations Servs., 270 Va. 246, 249 (2005) (valid provisions restricting employees from engaging in competitive activities were upheld. However, the court found that a former employee may find new employment with his former employer’s competitor in which he engages exclusively in activities that do not compete with the former employer.)

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Virginia Bans Non-Competes for Low-Wage Employees (Effective July 1, 2020)

Virginia banned non-compete agreements for "low-wage employees" under Va. Code § 40.1-28.7:8.

Who is protected?

• Employees earning less than $67,080 per year (as of 2024)

• Independent contractors making less than $13.47 per hour

• Interns, students, apprentices, and entry-level workers

What does this law do?
✔️ Prohibits non-compete agreements for low-wage workers
✔️ Allows employees to sue employers for violations
✔️ Imposes civil penalties of up to $10,000 per violation

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How Fox & Moghul Can Help

At Fox & Moghul, our non-compete attorneys are experienced in business litigation and employment law. We have successfully:

✔️ Defended employees from overbroad non-competes
✔️ Drafted and enforced customized non-compete agreements for businesses
✔️ Negotiated settlements to modify or void non-compete clauses
✔️ Litigated high-stakes non-compete disputes in Virginia courts

Need Help? Call Fox & Moghul Today!

Whether you are an employer seeking to enforce a non-compete or an employee looking to challenge one, Fox & Moghul is here to help.

Offices in Fairfax, Arlington, and Loudoun
Call: (703) 652-5506