A Virginia Court Just Issued a Radical Decision on Noncompetes. Will Other States Follow Suit?
Over the past few years, states have been passing laws restricting the use of noncompetition agreements for employees. For example, California has a virtually absolute ban against them. Several jurisdictions, including Virginia, Colorado, Illinois, and Washington, have adopted salary thresholds that determine whether noncompetes are enforceable. Although those laws are described as protecting only low-wage workers, the salary thresholds are relatively high. Colorado’s threshold, for example, has risen to approximately $130,000 in 2026.
The result is a patchwork of rules that vary significantly depending on location. Employers who operate across multiple states now face a compliance environment that demands close attention to local law.
The fallback for employers has been to rely on restrictions that prohibit former employees from soliciting customers and former fellow employees to leave their employers. Those provisions historically have been seen by the courts and legislatures as striking a reasonable balance: employees should be free to compete, so long as they don’t try to take their former employer’s employees and customers with them.
Now, the employee nonsolicitation restriction may be off the table. Last month, the Virginia Court of Appeals ruled in Sentry Force Security, LLC v. Barrera that Virginia’s noncompetition statute prohibited not only noncompetition clauses, but also employee nonsolicitation clauses. The court held that while employers may prohibit former employees from soliciting customers, they may not enforce agreements that prevent former employees from soliciting co-workers. In that case, the court upheld the right of an employer to bar solicitation of customers because that restriction does not fall within the statutory definition of a prohibited “covenant not to compete” when it simply restricts active solicitation.
However, now, according to the court in Sentry Force Security, a restriction that bars solicitation of fellow employees after termination does fall within the statute prohibiting noncompetition agreements and is therefore unenforceable.
That court decision represents a dramatic policy shift. As a result of that decision and the sentiment in other states, businesses that continue using standardized agreements across all employees expose themselves to legal risk. Employers should be aware of several key issues:
- Salary thresholds can invalidate agreements automatically
- Restrictions that extend too far geographically or last too long can be challenged
- Applying noncompetes to roles without access to confidential data weakens the likelihood of enforcement
- Courts may distinguish between customer non-solicitation and employee non-solicitation provisions, enforcing one while invalidating the other
These risks make it harder to rely on one-size-fits-all contract language. Employers must evaluate agreements individually and adjust them to reflect current law.
Non-Competes Still Serve a Purpose, But the Stakes Are Higher
The legal environment has become less predictable. Lawmakers and courts are looking more closely at whether an agreement truly protects something valuable or simply limits opportunity. Agreements that lack a clear business justification are more likely to face scrutiny or fail altogether.
This shift requires a more careful approach. Employers should consider the employee’s responsibilities, level of access, and potential competitive impact before imposing restrictions. Agreements that are narrowly focused and supported by legitimate business concerns stand a stronger chance of holding up if challenged.
At the same time, abandoning restrictive covenants entirely is not always the answer. The key is using them thoughtfully. Agreements must reflect current law, serve a legitimate purpose, and align with the employee’s role. Careful drafting and periodic review can make the difference between meaningful protection and unnecessary liability.
