Covenants not to compete; low-wage employees, civil penalty. (SB480)

Introduced By

Sen. Bill DeSteph (R-Virginia Beach) with support from co-patron Sen. Joe Morrissey (D-Richmond)

Description

Covenants not to compete; low-wage employees; civil penalty. Prohibits an employer from entering into, enforcing, or threatening to enforce a covenant not to compete between the employer and a low-wage employee. The employer is subject to a civil penalty of $10,000 per violation. The bill defines "low-wage employee" as either (i) an employee, intern, student, apprentice, or trainee whose average weekly earnings are less than the average weekly wage of the Commonwealth or who is employed without pay or (ii) an independent contractor who is compensated for his services at an hourly rate that is less than the median hourly wage for the Commonwealth for all occupations as reported by the Bureau of Labor Statistics of the U.S. Department of Labor. The bill defines "covenant not to compete" as an agreement that restrains, prohibits, or otherwise restricts an individual's ability to compete with his former employer. The bill allows any low-wage employee subject to such a covenant not to compete to bring a civil action against an employer and seek appropriate relief, including enjoining the conduct of any person or employer, ordering payment of liquidated damages, and awarding lost compensation, damages, and reasonable attorney fees and costs. The bill provides that if the court finds a violation of the bill's provisions, the plaintiff is entitled to recover reasonable costs, including costs and reasonable fees for expert witnesses, and attorney fees from the former employer or other person who attempts to enforce a covenant not to compete against such plaintiff. The bill requires all employers to post in the workplace a notice of the prohibition or a summary of the notice approved by the Department of Labor and Industry and provides that an employer is subject to a warning for a first offense and to a civil penalty for a subsequent offense for failure to post such notice or approved summary. The provisions of the bill are applicable to covenants not to compete entered into on or after July 1, 2020. Read the Bill »

Status

02/24/2020: Passed the House

History

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