SB 480 — Employment; covenants not to compete, definition of low-wage employees, civil penalty.
Last action — Approved by Governor-Chapter 949 (effective 7/1/20)
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✓Introduced
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✓In Committee
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✓Passed Senate
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✓Passed House of Delegates
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✓To Executive
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6Enacted
This bill has been enacted into law. Introduced January 07, 2020. Enacted.
Prognosis
Where this bill stands today.
Odds of enactment
HighHow often bills like it became law.
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Enacted
Current position in the legislative process.
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2 sponsors
1 primary, 1 co-sponsors signed on.
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Mixed recorded votes
10 passed, 1 failed in recorded votes so far.
Prognosis reads this bill's own signals — stage, sponsorship breadth, committee status, recorded votes and cross-state momentum. Odds come from a model trained on which bills have become law.
Summary
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 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. This bill is identical to HB 330.
Bill Text
What changed in the latest version
11 added · 11 removedPlain-language change summary
The recent amendments to Bill SB 480 added a new chapter that clarifies the definition and implications of "covenant not to compete" agreements between employers and employees. Specifically, it emphasizes that such agreements cannot prevent employees from serving customers unless they actively solicit those clients. This matters because it provides greater freedom for employees to work with clients after leaving their job, potentially enhancing job mobility and fair competition in the workplace.
SESSION history | hilite | pdf | print version VIRGINIA ACTS OF ASSEMBLY -- CHAPTER 949 An Act to amend the Code of Virginia by adding in Article 1 of Chapter 3 of Title 40.1 a section numbered 40.1-28.7:7, relating to covenants not to compete;
[S 480] Approved April 9, 2020 Be it enacted by the General Assembly of Virginia:
View plain text versions (6)
- Acts of Assembly Chapter text (CHAP0949) View text Current html April 09, 2020
- Bill text as passed Senate and House (SB480ER) View text html March 18, 2020
- Impact statement from DPB (SB480S1) View text html March 04, 2020
- Impact statement from DPB (SB480H1) View text html February 18, 2020
- Amended Engrossed by Senate as amended SB480E html February 03, 2020
- Impact statement from DPB (SB480) View text html January 07, 2020
Action History
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Approved by Governor-Chapter 949 (effective 7/1/20)
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Impact statement from DPB (SB480ER)
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Governor's Action Deadline 11:59 p.m., April 11, 2020
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Enrolled Bill Communicated to Governor on March 20, 2020
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Signed by Speaker
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Signed by President
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Enrolled
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Conference report agreed to by Senate (34-Y 6-N)
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Impact statement from DPB (SB480S1)
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VOTE: Agree To (74-Y 20-N)
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Conference report agreed to by House (74-Y 20-N)
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Conference substitute printed 20109575D-S1
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Amended by conference committee
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Conferees appointed by House
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Conferees appointed by Senate
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Senate acceded to request (40-Y 0-N)
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House requested conference committee
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House insisted on substitute
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House substitute rejected by Senate (0-Y 40-N)
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VOTE: Passage (80-Y 19-N)
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Passed House with substitute (80-Y 19-N)
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Engrossed by House - committee substitute SB480H1
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Committee substitute agreed to 20108594D-H1
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Read third time
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Impact statement from DPB (SB480H1)
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Passed by for the day
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Passed by for the day
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Committee substitute printed 20108594D-H1
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Reported from Labor and Commerce with substitute (19-Y 0-N)
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Referred to Committee on Labor and Commerce
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Read first time
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Placed on Calendar
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Passed Senate (34-Y 6-N)
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Constitutional reading dispensed (39-Y 1-N)
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Printed as engrossed 20103725D-E
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Engrossed by Senate as amended SB480E
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Amendment by Senator Petersen agreed to
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Reading of amendment waived
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Engrossment reconsidered by Senate (39-Y 0-N)
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Passed by for the day
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Read second time and engrossed
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Constitutional reading dispensed (40-Y 0-N)
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Reported from Commerce and Labor (14-Y 1-N)
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Impact statement from DPB (SB480)
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Referred to Committee on Commerce and Labor
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Prefiled and ordered printed; offered 01/08/20 20103725D
Sponsors
- Bill DeSteph · Primary
- Joseph D. Morrissey · Cosponsor
Sponsorship breakdown
Export CSV (upgrade) →1 sponsors · 1 co-sponsors · 146 not signed on · 57 voted No
Sponsors (1)
- Bill DeSteph Voted No
Co-sponsors (1)
- Joseph D. Morrissey
Not signed on (146)
146 members have not signed on to this bill.
Show all 146 →"Not signed on" means a member has not sponsored or co-sponsored this bill — it does not imply opposition. Members flagged Voted No have a recorded No vote on this bill.
Votes
| Party | Yea | Nay | Present | Not Voting |
|---|---|---|---|---|
| Unaffiliated | 34 | 6 | 0 | 0 |
| Total | 34 | 6 | 0 | 0 |
| % of votes cast | 85% | 15% | 0% | 0% |
How each member voted (40)
| Party | Yea | Nay | Present | Not Voting |
|---|---|---|---|---|
| Unaffiliated | 73 | 20 | 0 | 6 |
| Total | 73 | 20 | 0 | 6 |
| % of votes cast | 74% | 20% | 0% | 6% |
How each member voted (99)
| Party | Yea | Nay | Present | Not Voting |
|---|---|---|---|---|
| Unaffiliated | 40 | 0 | 0 | 0 |
| Total | 40 | 0 | 0 | 0 |
| % of votes cast | 100% | 0% | 0% | 0% |
How each member voted (40)
| Party | Yea | Nay | Present | Not Voting |
|---|---|---|---|---|
| Unaffiliated | 0 | 40 | 0 | 0 |
| Total | 0 | 40 | 0 | 0 |
| % of votes cast | 0% | 100% | 0% | 0% |
How each member voted (40)
| Party | Yea | Nay | Present | Not Voting |
|---|---|---|---|---|
| Unaffiliated | 79 | 19 | 0 | 1 |
| Total | 79 | 19 | 0 | 1 |
| % of votes cast | 80% | 19% | 0% | 1% |
How each member voted (99)
| Party | Yea | Nay | Present | Not Voting |
|---|---|---|---|---|
| Unaffiliated | 19 | 0 | 0 | 3 |
| Total | 19 | 0 | 0 | 3 |
| % of votes cast | 86% | 0% | 0% | 14% |
How each member voted (22)
| Member | Party | Vote |
|---|---|---|
| Lindsey, Joseph C. | — | Yea |
| Alfonso H. Lopez | — | Yea |
| Ayala, Hala S. | — | Yea |
| Bourne, Jeffrey M. | — | Not Voting |
| Byron, Kathy J. | — | Yea |
| Christopher T. Head | — | Yea |
| Gooditis, Wendy W. | — | Yea |
| Guzman, Elizabeth R. | — | Yea |
| Heretick, Steve E. | — | Yea |
| Israel D. O'Quinn | — | Yea |
| Jeion A. Ward | — | Yea |
| Keam, Mark L. | — | Yea |
| Kory, Kaye | — | Yea |
| Lamont Bagby | — | Yea |
| Marshall, Daniel W., III | — | Yea |
| Michael J. Webert | — | Yea |
| Mullin, Michael P. | — | Not Voting |
| R. Lee Ware | — | Yea |
| Ransone, Margaret B. | — | Yea |
| Richard C. "Rip" Sullivan, Jr. | — | Not Voting |
| Terry G. Kilgore | — | Yea |
| Tony O. Wilt | — | Yea |
| Party | Yea | Nay | Present | Not Voting |
|---|---|---|---|---|
| Unaffiliated | 34 | 6 | 0 | 0 |
| Total | 34 | 6 | 0 | 0 |
| % of votes cast | 85% | 15% | 0% | 0% |
How each member voted (40)
| Party | Yea | Nay | Present | Not Voting |
|---|---|---|---|---|
| Unaffiliated | 39 | 1 | 0 | 0 |
| Total | 39 | 1 | 0 | 0 |
| % of votes cast | 98% | 3% | 0% | 0% |
How each member voted (40)
| Party | Yea | Nay | Present | Not Voting |
|---|---|---|---|---|
| Unaffiliated | 39 | 0 | 0 | 1 |
| Total | 39 | 0 | 0 | 1 |
| % of votes cast | 98% | 0% | 0% | 3% |
How each member voted (40)
| Party | Yea | Nay | Present | Not Voting |
|---|---|---|---|---|
| Unaffiliated | 40 | 0 | 0 | 0 |
| Total | 40 | 0 | 0 | 0 |
| % of votes cast | 100% | 0% | 0% | 0% |
How each member voted (40)
| Party | Yea | Nay | Present | Not Voting |
|---|---|---|---|---|
| Unaffiliated | 14 | 1 | 0 | 0 |
| Total | 14 | 1 | 0 | 0 |
| % of votes cast | 93% | 7% | 0% | 0% |
How each member voted (15)
| Member | Party | Vote |
|---|---|---|
| Saslaw, Richard L. | — | Yea |
| Norment, Thomas K., Jr. | — | Yea |
| Spruill, Lionell, Sr. | — | Yea |
| Newman, Stephen D. | — | Yea |
| Edwards, John S. | — | Yea |
| Barker, George L. | — | Yea |
| Lewis, Lynwood W., Jr. | — | Yea |
| Mason, T. Montgomery "Monty" | — | Yea |
| Bell, John J. | — | Yea |
| Adam P. Ebbin | — | Yea |
| David W. Marsden | — | Yea |
| L. Louise Lucas | — | Yea |
| Mark D. Obenshain | — | Nay |
| R. Creigh Deeds | — | Yea |
| Scott A. Surovell | — | Yea |
Subjects
Frequently asked questions
- What does SB 480 do?
- 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 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. This bill is identical to HB 330.
- Who sponsors SB 480?
- SB 480 is sponsored by Bill DeSteph and Joseph D. Morrissey.
- What is the current status of SB 480?
- This bill has been enacted into law. Introduced January 07, 2020. Enacted.
- Where can I track SB 480?
- Track SB 480 free on One Click Politics — get push/email alerts when it moves.
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