Employee Restrictive Covenant Agreement
Cover Terms
The terms below are incorporated into and form part of this agreement.
| Employer | [Legal name of the employer] |
| Employee | [Full legal name of the employee] |
| Employee Title / Position | |
| Effective Date | [Effective date of this agreement — the date the last party signs. It anchors the durations stated in Cover Terms.] |
| Governing Law | Virginia |
| Without-Cause Severance / Disclosed Compensation | severance equal to the Employee's base salary for the length of the Restricted Period, paid over that period |
| Confidentiality | |
| Trade Secrets Duration | Perpetual |
| Other Confidential Information Duration | 24 months |
| Employee Non-Solicitation | |
| Duration | 24 monthsMarket benchmark 24 months · modal of 67 filed agreementsReference only — not part of this agreement. 24 months matches the modal employee non-solicit term observed in benchmarked, publicly-filed employee agreements; 12 months is the common lighter alternative. Virginia weighs function, geography, and duration together, so the longer market term is defensible only where the other elements are tightly drawn.
|
| Covered Employee Period | 12 months |
| Customer Non-Solicitation | |
| Duration | 12 monthsMarket benchmark 12 months · modal of 67 filed agreementsReference only — not part of this agreement. 12 months is the lighter side of the near-even 12/24-month split observed in benchmarked, publicly-filed employee agreements and is a common enforceable duration here. Because Virginia assesses function, geography, and duration together, a shorter term reduces the room for a court to find the covenant broader than the employer's legitimate interest requires.
|
| Covered Customer Period | 12 months |
| Non-Competition | |
| Duration | 12 monthsMarket benchmark 12 months · modal of 70 filed agreementsReference only — not part of this agreement. 12 months matches the modal non-compete term observed in benchmarked, publicly-filed employee agreements — a common, conservative pick rather than a Virginia ceiling (Virginia sets no fixed duration). Virginia never reads duration in isolation; it weighs function, geography, and duration together, so a modest period cannot redeem an immodest function or territory.
|
| Restricted Territory | the geographic area in which Employee worked or had responsibility for Employer during the last two years of employment |
| Competitive Business | [Description of the business activities that constitute competition with the employer.] |
| Specified Competitors | |
| No Business with Covered Customers | |
| Duration | 12 months |
| Non-Investment | |
| Duration | 12 months |
| Passive Public Holdings Threshold | five percentMarket benchmark 5 % · modal of 48 filed agreementsReference only — not part of this agreement. Five percent of any class of publicly traded securities is the modal passive-investment carve-out threshold observed in benchmarked, publicly-filed employee agreements that include the carve-out (lower 1-3 percent thresholds are the common tighter alternatives), and a de minimis floor keeps an ownership restraint from reading as unduly harsh under the Omniplex second prong.
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| Non-Disparagement | |
| Duration | 24 months |
Virginia statutory gate Low-Wage Threshold (Average Weekly Earnings) — $1,507.01 per week
Reference only — not part of this agreement.
$1,507.01 per week is the 2026 low-wage threshold published by the Virginia Department of Workforce Development and Advancement. The Department resets it annually, so counsel should confirm the figure for the covenant's execution year. (as of July 3, 2026)
Standard Terms
1. Defined Terms
“Competitive Business” means the business activities described in Cover Terms under Competitive Business.
“Confidential Information” means non-public information relating to Employer's business, including trade secrets, customer lists, pricing, business processes, technical data, and strategic plans, but excluding information that becomes public through no fault of Employee, information that arises from Employee's general training, knowledge, skill, or experience whether gained on the job or otherwise, information that is readily ascertainable to the public, and information Employee otherwise has a right to disclose as legally protected conduct.
“Covered Customers” means customers, vendors, referral sources, and business partners with whom Employee had material contact or for whom Employee had responsibility during the 12 months before termination of employment.
“Covered Employees” means employees with whom Employee worked or whom Employee managed during the 12 months before termination of employment.
“Passive Public Holdings” means ownership of securities of a publicly traded company representing less than five percent of any class of such company's securities, and interests in diversified mutual funds, index funds, and exchange-traded funds that may hold securities of a Competitive Business.
“Protected Interests” means Employer's Protected Interests, including its Trade Secrets and other Confidential Information, its customer and referral relationships, and the goodwill Employee helped develop.
“Restricted Period” means the duration specified in Cover Terms for each covenant, beginning on the date Employee's employment with Employer ends for any reason.
“Restricted Territory” means the geographic area described in Cover Terms under Restricted Territory.
“Solicit” means to directly or indirectly initiate contact with, approach, induce, or encourage any person or entity for the purpose of diverting business away from Employer, but does not include responding to general advertisements or to inquiries or business initiated by the customer, client, or person and not solicited by Employee.
“Trade Secrets” means information that derives independent economic value from not being generally known or readily ascertainable by proper means and is subject to reasonable efforts to maintain its secrecy.
2. Recitals and Protected Interests
Employer and Employee acknowledge that each restrictive covenant in this agreement is ancillary to a valid employment relationship. Employee will receive access to Employer's Trade Secrets and other Confidential Information and will develop customer relationships and goodwill on Employer's behalf. Each covenant protects those Protected Interests and is reasonably limited in duration, territory, and scope.
3. Timing, Consideration, and Workplace Posting
This agreement is effective as of the Effective Date listed in Cover Terms. Employee acknowledges having had a genuine opportunity to review this agreement, and to consult an attorney about it, before signing.
Drafting Note Post the workplace notice before rolling out covenants
There is a statutory obligation to post a copy of § 40.1-28.7:8, or a Department-approved summary, where other required employee notices are posted . Treat the posting as a rollout-checklist item: confirm it is up before any Virginia covenant program goes out. An employer relying on the section's exceptions while ignoring its posting duty is out of compliance with the same section.
4. Virginia Worker Exclusions
(a) No covenant not to compete applies when the eligibility determination completed for Employee indicates that the applicable compensation or worker-status exclusion applies.
(b) No covenant not to compete applies when Employee is eligible for overtime compensation.
(c) No covenant in this agreement restricts Employee from providing a service to a customer or client of Employer if Employee does not initiate contact with or solicit that customer or client.
If any other provision of this agreement conflicts with this Virginia Worker Exclusions section, this section controls.
Drafting Note Statutory exposure behind the worker-protection gates
The statute's protections surface in the covenant only as operative carve-outs; its enforcement apparatus lives in § 40.1-28.7:8, not in the contract text, and it is severe. A covered worker may sue within the statutory limitations window, and a court may void the covenant, enjoin conduct, and award liquidated damages, lost compensation, damages, and reasonable costs, expert fees, and attorney fees . DOLI may assess a $10,000 civil penalty for each violation, and merely presenting or threatening to enforce a barred covenant is itself a violation — so confirm the worker is outside the protected class before you hand over the OpenAgreements Virginia restrictive covenant form at all . The protected class reaches beyond the weekly-earnings figure to interns, students, apprentices, trainees, and certain lower-paid independent contractors, while excluding predominantly commission-, incentive-, or bonus-compensated workers . The current-year threshold surfaced beneath Cover Terms resets annually . A successor or assignee inherits the same statutory bar along with the contract.
Drafting Note Customer-initiated business stays open
The customer non-solicitation covenant reaches only the worker's own initiation or solicitation, and the worker-protection gates preserve customer-initiated business, because that is the line the statute draws: a bar on direct, employee-initiated solicitation survives even assuming the worker is protected, while customer-initiated business cannot be blocked . The optional no-business-with-covered-customers covenant bars serving a customer even when the customer calls first — the exact conduct the carve-out preserves — so it collides head-on with the statute for any protected worker and defaults off; include it only for a worker outside the protected class as a deliberate risk decision.
5. Confidential Information and Trade Secret Protection
Employee must treat all Confidential Information as strictly confidential. Employee must not use or disclose Confidential Information except as required to perform authorized job duties or with Employer's prior written consent. Employee's obligations regarding Trade Secrets continue for the period specified in Cover Terms under Trade Secrets Duration. Employee's obligations regarding other Confidential Information continue for the period specified in Cover Terms under Other Confidential Information Duration. This section does not prohibit Employee from using information that arises from Employee's general training, knowledge, skill, or experience, from using information that is readily ascertainable to the public, or from disclosing information that Employee otherwise has a right to disclose as legally protected conduct.
Drafting Note Confidentiality covenant not a disguised non-compete
Keep confidentiality and trade-secret covenants separate from a work ban. A clause labeled as confidentiality can still create non-compete risk if it restrains ordinary competition rather than protecting specific confidential, proprietary, or trade-secret information .
6. Permitted Disclosures and Protected Conduct
Nothing in this agreement prohibits Employee from: (a) reporting possible violations of law to any government agency, including the Securities and Exchange Commission, the Equal Employment Opportunity Commission, the Occupational Safety and Health Administration, or any other federal, state, or local agency; (b) making disclosures protected under whistleblower provisions of any law; (c) discussing wages, hours, or other terms and conditions of employment as protected by applicable law, including Section 7 of the National Labor Relations Act, 29 U.S.C. § 157; (d) testifying truthfully in legal proceedings; (e) disclosing information that arises from Employee's general training, knowledge, skill, or experience, information readily ascertainable to the public, or information Employee otherwise has a right to disclose as legally protected conduct; or (f) filing a sealed complaint in court using Confidential Information without liability. Pursuant to the Defend Trade Secrets Act (18 U.S.C. § 1833(b)), Employee may not be held criminally or civilly liable for disclosing a trade secret in confidence to a government official or attorney solely for the purpose of reporting or investigating a suspected violation of law, or in a sealed court filing.
7. Return, Deletion, and Certification of Company Property
Upon termination of employment, Employee must promptly return to Employer all documents, devices, files, credentials, and other materials containing or relating to Confidential Information. Where permitted, Employee must permanently delete electronic copies of Confidential Information from personal devices and accounts. Employee must certify compliance with this section in writing upon Employer's request.
8. Non-Solicitation of Employees
During the Restricted Period, Employee must not Solicit, recruit, hire, or attempt to hire any Covered Employee. This restriction is limited to initiating contact with or actively soliciting Covered Employees; it does not prohibit Employee from providing a professional reference upon request or from hiring a person who responds to a general advertisement not directed specifically at Employer's employees.
Drafting Note Employee non-solicits and protected workers
Leave the employee non-solicitation covenant switched off unless you have confirmed the worker is outside § 40.1-28.7:8's protected class. The only Virginia appellate reading on point treats an employee non-solicit as a covenant not to compete for a protected worker: in unpublished Sentry Force Security, LLC v. Barrera, the Court of Appeals held the statute prevented enforcing a covenant barring a departed protected worker from soliciting the employer's other employees . Switch it on only after that check clears; the worker-protection gates in the OpenAgreements Virginia restrictive covenant form still control if you get it wrong.
9. Non-Solicitation of Customers, Vendors, Referral Sources, and Business Partners
During the Restricted Period, Employee must not Solicit the business of any Covered Customer. This covenant does not restrict Employee from providing a service to a Covered Customer who initiates contact with Employee and whom Employee did not solicit.
10. No Business with Covered Customers
During the Restricted Period, Employee must not accept, service, or do business with any Covered Customer, regardless of who initiates contact.
11. Non-Competition
During the Restricted Period, Employee must not, within the Restricted Territory, engage in, be employed by, consult for, or have an active ownership interest in any Competitive Business, in a role the same as or similar to the role Employee performed for Employer. This covenant is confined to the activities Employee actually performed for Employer; it does not bar Employee from serving a Competitive Business in a capacity unrelated to those activities. Passive Public Holdings are permitted.
Drafting Note Function tailoring and the employer's burden
Confine the non-compete to the role Employee actually performed — that tailoring, not any recital, is what carries it. The OpenAgreements Virginia restrictive covenant form gives you no reasonableness clause to lean on, and none would help: Virginia weighs function, geography, and duration together under the three-part test — no greater than necessary for a legitimate business interest, not unduly harsh on the worker's livelihood, consistent with sound public policy — and the employer bears the burden on every prong . Function is where Virginia covenants die: an any-capacity bar and a similar-business definition reaching unrelated enterprises have both been struck, and clear function overbreadth cannot be saved by narrow geography and duration . List real Specified Competitors in Cover Terms so the covenant visibly reaches no further than the protected interest requires; a recital will not substitute for that showing if you have to defend the covenant .
12. Narrowing by Specified Competitors
Where Cover Terms list Specified Competitors, the non-competition covenant is limited to those named competitors and their affiliates rather than an open-ended competitive-business definition.
13. Non-Investment
During the Restricted Period, Employee must not acquire or hold any active ownership interest in, serve as a director, officer, manager, or advisor to, or have material economic participation in any Competitive Business. Passive Public Holdings are permitted.
14. Without-Cause Termination — Severance and Disclosed Compensation
If Employer discharges Employee without cause, Employer will provide Employee the Without-Cause Severance / Disclosed Compensation stated in Cover Terms, which the parties disclose and agree upon at execution of this agreement.
Drafting Note SB 170 without-cause severance mechanics
The without-cause severance clause implements the SB 170 rule: for agreements entered into, amended, or renewed on or after July 1, 2026, a non-compete is unenforceable after a discharge without cause unless the employee receives severance benefits or another monetary payment disclosed when the covenant is signed . The clause states the commitment on the face of the agreement so the disclosure-at-execution element is satisfied rather than improvised at termination. The rule is prospective — but a routine amendment or renewal of an older covenant pulls it into the current regime, so the severance economics must be in place before any amendment or renewal takes effect .
15. Health Care Professional Exclusion
Notwithstanding any other provision of this agreement, no covenant not to compete in this agreement applies to or is enforceable against Employee if Employee is licensed, registered, or certified by the Board of Medicine, Nursing, Counseling, Optometry, Psychology, or Social Work, regardless of Employee's earnings.
Drafting Note Health care professional exclusion provenance
The health care exclusion states the covered licenses as an objective condition rather than labeling the worker. It implements the SB 128 categorical ban, effective July 1, 2026, for persons licensed, registered, or certified by the Board of Medicine, Nursing, Counseling, Optometry, Psychology, or Social Work — and no earnings level restores an employment non-compete for a covered professional .
16. Non-Disparagement
During the Restricted Period specified in Cover Terms for Non-Disparagement, Employee must not make statements that are intended to or reasonably likely to disparage Employer, its officers, directors, employees, products, or services. This section does not restrict Employee from making truthful statements in legal proceedings, providing truthful testimony, making disclosures to government agencies, discussing wages, hours, or working conditions as protected by law, or otherwise exercising rights protected by law.
17. No Conflicting Obligations
Employee represents that performing duties for Employer and complying with this agreement does not conflict with any prior agreement, court order, or legal obligation binding on Employee. Employee must promptly disclose to Employer any potential conflict that arises during employment.
18. Notice to Future Employers and Other Third Parties
Employer may disclose the existence and terms of obligations then in effect under this agreement to a prospective employer or business associate of Employee. Employee consents to a disclosure permitted by this section.
19. Tolling During Breach
The Restricted Period for each covenant runs from the date Employee's employment ends and is not extended by any period of breach.
20. Remedies
Employee acknowledges that a breach of this agreement may cause Employer irreparable harm for which money damages would be inadequate, and Employer may seek injunctive or other equitable relief in addition to any other remedies available at law. Any fee-shifting between the parties under this agreement is mutual and prevailing-party based.
21. Enforceability and Severability
If any provision of this agreement is found to be unenforceable, the remaining provisions remain in full force and effect. Each restrictive covenant in this agreement is independently enforceable.
22. Survival and Expiration of Each Covenant
Each restrictive covenant in this agreement survives the termination of Employee's employment for the Restricted Period specified in Cover Terms for that covenant. Obligations under the Confidential Information and Trade Secret Protection section survive as long as the relevant information remains a trade secret. All other provisions survive to the extent necessary to enforce rights that arose during employment.
23. Assignment and Successors
Employee may not assign this agreement or any rights or obligations under it. Employer may assign this agreement to any affiliate, successor, or acquirer of all or substantially all of Employer's business or assets. Any assignee or successor takes the covenants subject to all existing limitations under this agreement and applicable law. This agreement is binding on and inures to the benefit of the parties and their respective heirs, successors, and permitted assigns.
24. Governing Law, Venue, and Dispute Process
This agreement is governed by the law listed in Cover Terms. All disputes will be resolved in the courts of the Governing Law state, subject to non-waivable rights under applicable law.
25. Entire Agreement, Amendment, Waiver, and Electronic Signatures
This agreement constitutes the entire agreement between the parties regarding its subject matter and supersedes all prior agreements, understandings, and negotiations on this subject. This agreement may be amended only in writing signed by both parties. A party's failure to enforce any provision does not waive that party's right to enforce it later. This agreement may be executed in counterparts, including by electronic signature, each of which is an original.
Signatures
By signing this agreement, each party acknowledges and agrees to the restrictive covenant obligations above. Employee confirms having read and understood each provision, including the Cover Terms.
Employer
Employer: [Legal name of the employer]
Signature:
Signatory Name: [Full name of the authorized signatory signing for the employer]
Title: [Title of the authorized signatory signing for the employer]
Date:
Employee
Signature:
Print Name: [Full legal name of the employee]
Date: