Non-compete agreements can help protect your business when employees move on in their careers. However, if not well-crafted, these can also hurt your employees. The agreements can potentially limit your employees’ job options.
This is why Virginia instituted non-compete restrictions in 2020. Unless your employees meet specific requirements, you can’t force them not to consider offers from your competitors.
Who can enter non-compete agreements
A non-compete clause limits where and how former employees can work after leaving your company. In Virginia, you cannot enforce these on low-wage employees. This law applies to:
- Employees earning less than $1,410 per week or around $73,320 per year
- Independently contracted workers
- Interns, apprentices, trainees or students
Take note that the commonwealth adjusts the wage threshold for low-wage employees each year.
When exceptions might apply
One possible exception to the new law is existing contracts. If your employee signed an agreement before the law took effect on July 1, 2020, those are still valid. However, be careful about your contracts. Remember that any new contracts or renewals need to follow current wage thresholds and laws.
What happens if you enforce prohibited non-competes
Trying to enforce a non-compete agreement when your employees don’t meet wage requirements can lead to serious consequences. You can face:
- Civil penalties up to $10,000 per violation
- Lengthy legal battles with affected employees
- Paying damages for lost wages, benefits and legal fees
You can also face possible government investigation on your business practices. This may require policy changes and overhauls.
Protecting your business and your employees
Laws change to reflect the sentiment of those involved and the current times. Failure to keep up with current regulations can spell disaster for your business. Working with an experienced employment law attorney may help you avoid these issues.
An attorney can help you stay updated on relevant laws. And if your employees meet the wage requirements, they can help you craft an agreement that protects your business interests without totally restricting your employee’s future career.
Remember, your business success depends on protecting your interests and maintaining positive workplace relationships.