Protecting Trade Secrets in Virginia When Non-Competes Are Limited

For years, Virginia employers leaned on non-compete agreements to keep departing employees from walking sensitive information straight to a competitor. That tool has narrowed sharply. A Virginia business law attorney now spends far more time advising companies on how to protect what they know, because the legislature has steadily shrunk the pool of workers who can legally be bound by a covenant not to compete. The good news is that a non-compete was never the only way to guard confidential information, and in many cases it was not the strongest one. Understanding what still works, and building protection around it, matters more than ever for businesses across the Commonwealth.

How Far Virginia Has Restricted Non-Competes

The shift started in 2020 and has accelerated. Virginia first banned non-competes for “low-wage” employees, defined by the Commonwealth’s average weekly wage, which in 2026 sits at roughly $78,364 per year. A 2025 amendment went further, extending the prohibition to any employee classified as non-exempt under the federal Fair Labor Standards Act, meaning anyone eligible for overtime regardless of salary.

The trend continues. Beginning July 1, 2026, a non-compete becomes void against an employee fired without cause unless the employer provides a severance benefit, and that benefit has to be disclosed when the agreement is signed. Virginia courts have also read the existing ban to reach certain employee non-solicitation and no-business clauses, closing what employers once treated as workarounds. The practical result is that for a large share of the workforce, a non-compete is either unavailable or fragile.

Trade Secret Protection Picks Up the Slack

A non-compete restricts where a person can work. Trade secret law restricts what they can take and use, and that distinction is why it remains powerful even as covenants fade. Virginia has adopted the Virginia Uniform Trade Secrets Act, which protects information that derives independent economic value from not being generally known and that the owner takes reasonable steps to keep secret.

That definition is broad. Customer lists, pricing formulas, manufacturing processes, software code, marketing strategies, and supplier terms can all qualify, provided the business actually treats them as secret. Unlike a non-compete, trade secret protection does not expire when an employee leaves, does not depend on the worker’s salary, and applies to anyone who misappropriates the information, not just former employees. A competitor who hires your former sales director cannot use your stolen client database even if that director was never bound by any agreement at all.

What “Reasonable Efforts” Actually Requires

The catch in the statute is the phrase “reasonable efforts.” A business that claims something is a trade secret but treats it casually will lose in court. Protection has to be earned through how the information is handled day to day. Concrete measures that hold up include:

• Confidentiality and non-disclosure agreements signed by employees, contractors, and vendors with access to sensitive material
• Access controls that limit who can see what, rather than giving everyone the keys to everything
• Marking documents as confidential and storing them in secured, password-protected systems
• Exit procedures that recover devices, revoke access, and remind departing employees of their continuing obligations
• Training so staff understand what the company considers proprietary

These steps do double duty. They reduce the chance information walks out the door, and if it does, they supply the evidence that the company took the secrecy seriously enough to merit protection.

Agreements That Still Work in Virginia

Non-competes losing ground does not mean every restrictive agreement is off the table. Confidentiality and non-disclosure agreements remain fully enforceable and are not subject to the low-wage ban, since they restrict use of information rather than the right to work. Properly drafted invention assignment clauses, which secure company ownership of work product, also remain valid.

Even non-solicitation agreements retain some life, though they must be drafted carefully given how courts have begun treating them. The key is matching the right tool to the right risk. An agreement that tries to function as a backdoor non-compete invites a challenge, while one narrowly aimed at protecting genuine confidential information stands a much better chance of holding up.

Acting Before a Problem Arises

The worst time to discover your trade secret protections are thin is after a key employee has already left for a rival. By then the information may be gone and the evidence of reasonable efforts is whatever you happened to have in place. Building the framework in advance, with sound agreements and real security practices, is what gives a business leverage if it ever needs to seek an injunction or pursue a misappropriation claim. Courts respond to companies that can show a clear, consistent record of guarding their secrets.

Talk to a Virginia Business Law Attorney About Protecting What You Own

As non-competes continue to lose ground in the Commonwealth, the businesses that stay protected are the ones that shift their strategy toward trade secret safeguards and well-drafted confidentiality agreements. The law still offers strong tools, but they only work when they are put in place deliberately and maintained. If your company relies on information that would cause real harm in a competitor’s hands, an experienced Virginia business law attorney can help you assess your exposure and build protection that holds up. Reach out to The Mundaca Law Firm to schedule a consultation and safeguard your most valuable assets.