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Virginia Law On Non-Compete Agreements

by on Apr.15, 2021, under Uncategorized

Employers are not allowed to discriminate against low-wage workers or take revenge when they take legal action against a non-compete agreement under the new law. Employers also need a copy of the law or summary that have been approved by va Department of Labor and Industry (such a summary has not been published). Although employers receive a written warning, non-compliance with the posting requirement can result in civil fines of up to $1,000. If a court finds that only part of the non-competition agreement is invalid, it will object to the application of one of them. Virginia does not have a “blue pencil rule” that allows courts to remove invalid parts from a contract and enforce valid parties. In Virginia, non-competition bans are an all-or-nothing proposition. Third, the definition of “confederation, not competing” is broad enough. With only two types of agreements expressly proclaimed, the new law prohibits not only non-competition prohibitions, but any agreement that “restricts, prohibits or otherwise limits a person`s ability to compete after leaving the individual`s employment.” The two agreements specifically referred to are confidentiality agreements (excluded from the scope of the law) and non-service agreements for customers (which appear to be prohibited). Therefore, the most important thing is that, although service contracts are explicitly proclaimed, customer incentive agreements are probably also prohibited for low-wage workers. It remains to be seen what other restrictive agreements will also be covered (for example. B, the forfeiture of competition rules).

Senate Act 480 defines “low-wage workers” as workers whose average weekly wage over the past 52 weeks is “below the commonwealth average weekly wage,” as calculated under VA 65.2-500 (b). According to the most recent data from the Virginia Employment Commission (“VEC”), the average weekly wage is $1,204, which would be equivalent to about $62,600 per year and could cover about half of the workforce in Virginia. However, it is important to note that the VEC recalculates each quarter. Therefore, a non-competition agreement, which would otherwise be applicable under this new law if it is registered, could not be applicable in the event of an average wage increase. Virginia may be for lovers, but it no longer likes non-competition bans. From 1 July 2020, employers will not be able to enter into, apply or threaten to impose a non-competition agreement with a “low-wage employee”. As has already been pointed out, this legislation is just one of many new labour laws passed in the 2020 legislature. But even with this non-solicit carve-out, the new law is remarkable in that it apparently allows low-wage workers to circumvent precisely the kind of non-compete clause that many courts considered reasonable: a ban on serving the employer`s existing customers and customers.

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