Virginia’s governor recently signed into law nearly two dozen bills that provide significant new rights for Virginia employees, to combat wage theft, prohibit non-compete covenants for low-wage workers, and expand the scope of the ban on workplace discrimination. Also signed into law were enhanced employee whistleblower protections against retaliation for reporting suspected violations of state law or cooperating with law enforcement.
HB 123 provides Virginia employees with the right to proceed directly to court to seek the recovery of unpaid wages. Until now, Virginia employees did not have a statutory right to sue their employers for non-payment of wages. Their only recourse was to file a complaint with the Virginia DOL, which was viewed by many as slow or unresponsive.
The new wage payment law provides for enhanced damages, including: (1) the amount of wages due, (2) 8% interest from the wage due date, (3) liquidated damages, and (4) reasonable attorney fees and costs, if the court finds that the employer knowingly failed to pay wages. If the employer's failure to pay wages was willful and with intent to defraud the employee, the court may award the employee treble damages and reasonable attorney fees and costs. Employers also may be subject to a civil penalty of up to $1,000 for each violation.
Prohibition on Non-Competes for Low-Wage Workers
Virginia courts have always been skeptical of non-compete agreements as unfair restraints on trade. Yet employers have widely relied on them as a means of protecting against employee misuse of client relationships and opportunities to start a competing business. Now, as of July 1, 2020, Virginia employers will not be able to enter, enforce, or threaten to enforce a covenant not to compete with a “low-wage employee.” "Covenant not to compete" is an agreement that “restrains, prohibits, or otherwise restricts an individual's ability to compete with his former employer.”
A "low-wage employee" is (i) an employee, intern, student, apprentice, or trainee earning less than the average weekly wage in Virginia, or employed without pay, or (ii) an independent contractor compensated for services at an hourly rate that is less than the median Virginia hourly wage. The Virginia Employment Commission’s most recent quarterly report showed the average weekly wage for Virginia workers as $1,125 ($58,500 annually).
A low-wage employee subject to a covenant not to compete may bring a civil action against an employer for damages that include injunctive relief, liquidated damages, lost compensation, and reasonable attorney fees and costs of litigation.
Employers are required to post a notice of the prohibition on non-competes approved by the DOL and may be subject to a civil penalty for a repeated failure to post such notice.
New Protections against Workplace Discrimination
Effective July 1, 2020, the Virginia Human Rights Act (VHRA) prohibition on employment discrimination will include “sexual orientation” and “gender identity,” along with race, color, religion, national origin, sex, pregnancy, childbirth or related medical conditions, age, marital status, or disability. "Gender identity" means gender-related identity, appearance, or other gender-related characteristics of an individual, without regard to the individual's designated sex at birth. "Sexual orientation" is a person's actual or perceived heterosexuality, bisexuality, or homosexuality.
The new laws dramatically expand the private right of action available to employees claiming discrimination. Until now, the VHRA was applicable only to employers with at least 5, but fewer than 15, employees (for age discrimination, up to 20 employees). Federal antidiscrimination laws become applicable at the 15-employee level. The VHRA’s expansion to cover employers with 15 or more employees from discriminatory employment practices is expected to increase in the number of law suits filed against employers in Virginia state courts, where cases are more likely to go to a jury because state procedural rules limit the ability of courts to dismiss a case on summary judgment. Potential recoveries under the VHRA include compensatory damages, which, unlike federal law, are uncapped, punitive damages of up to $350,000, back pay, front pay, and emotional distress damages.
In addition, the VHRA was amended to provide workers with protections from employment discrimination based on pregnancy, childbirth or related medical conditions, and lactation, and to require employers to provide reasonable accommodations related to pregnancy and childbirth. Employees have a private right of action to sue for workplace pregnancy discrimination.
Virginia employers are required to post conspicuously, include in any employee handbook, and provide within 10 days to new employees, notice of the new prohibitions on discrimination, and the employee’s rights to reasonable accommodations. Notice must also be given to new employees at the start of their employment, and within 10 days to any employee who gives notice that she is pregnant.
Whistleblower Protections for Virginia Employees
HB 798 provides new whistleblower protections, and a private right of action, against retaliation for Virginia employees who, in good faith, report a violation of any federal or state law or regulation.
Whistleblower retaliation damages include: (i) injunctive relief, (ii) reinstatement of the employee, and (iii) recompense for lost wages, benefits, and other remuneration, interest on such amounts, as well as the recovery of reasonable attorney fees and costs of litigation.