New Virginia Law Prohibits Noncompete Agreements With Health Care Professionals

We recently reported on a new noncompete law in Virginia, effective July 1, 2026, that requires employers to pay severance in order to enforce a noncompete agreement against an employee terminated without cause. Virginia lawmakers passed another law, HB 627, also effective July 1, 2026, banning noncompete agreements with “health care professionals.” HB 627 is not retroactive and therefore does not apply to (or affect) any agreement entered prior to July 1, 2026.

Current Virginia law prohibits noncompete agreements with “low-wage employees.” HB 627 extends this prohibition to “health care professionals,” defined as any person licensed, registered, or certified by the Board of Medicine, Nursing, Counseling, Optometry, Psychology, or Social Work. 

Exceptions

Virginia’s existing prohibition for low-wage employees includes one exception — it allows employers to enter nondisclosure agreements with low-wage employees that are intended to protect trade secret and confidential information. HB 627 adds a sale-of-business exception, which lawmakers commonly include in prohibitions like this one. HB 627 also specifically allows agreements requiring health care professionals to repay their employer for recruitment-related costs, including relocation expenses, signing or retention bonuses, and other payment(s) provided to induce relocation or establishment of a practice (sometimes referred to as “TRAP agreements”). This exception allows employers to recoup qualifying expenses from a departing health care professional who has been employed for fewer than five years.

HB 627 also allows non-solicitation provisions, so long as such provisions are limited to (i) customers with whom the health care professional had material contact during employment and (ii) products and services that are the same as or substantially similar to those provided by the employer.

Penalties & Posting Requirements

Under Virginia’s existing law, an employer who violates Va. Code Ann. § 40.1-28.7:8 by entering into, enforcing, or threatening to enforce an invalid noncompete agreement with a low-wage employee may be subject to a $10,000 civil penalty for each violation.

Virginia law also includes posting requirements. An employer who fails to post the noncompete law in the workplace will be issued a written warning for the first offense, a civil penalty not to exceed $250 for the second offense, and a civil penalty not to exceed $1,000 for each subsequent offense.

Once HB 627 takes effect July 1, 2026, those same penalty provisions and posting requirements will apply to health care professionals in addition to low-wage employees. 

Conclusion

In light of these new restrictions, employers of health care professionals in Virginia should work with counsel to ensure that their agreements comply with the new restrictions.

This article was prepared with the assistance of 2026 summer associate Pouyan Ahmadi.