Virginia Employment Contract: Definition, Key Considerations

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What is a Virginia Employment Contract?

A Virginia employment contract is a type of contract entered into by employers and employees that details the terms and conditions surrounding employment. Important issues that are covered and negotiated in an employment contract include:

• Job title
• Job duties
• Working hours
• Salary
• Benefits
• Time off and vacation time
• Company policies
• Reasons for termination
• Non-compete clause
• Non-disclosure clause
• Confidentiality clauses

It is most common for employers to draft an employment contract when hiring a highly paid or uniquely skilled worker. However, these agreements are also useful when hiring regular employees, contractors, consultants, and freelance workers.

Virginia is one of the many states that follows the “at will” employment doctrine. Under these laws, employers have the right to fire employees without a reason and without notice. The only firing restriction is the public policy exception which states that an employer cannot fire an employee if it involves an employee’s compliance with state policy.

A valid and legally enforceable employment contract will override the “at will” employment law and classify an employee as a “contracted employee”. This will grant the employee certain rights and protections in accordance with terms in the contract.

Are Employment Contracts Enforceable in Virginia?

Yes. Employment contracts are enforceable in Virginia as long as they abide by all applicable contract laws. Laws governing contracts require that an enforceable contract have an offer, acceptance, and consideration. The contract must be entered into voluntarily by competent parties and cannot violate criminal statutes or public policy.

Restrictive employment contracts like non-compete agreements are also enforceable in Virginia as long as they meet certain requirements as described in the Code of Virginia about protection of employees.

Some of these restrictions include:

1. The non-compete agreement cannot have restrictions greater than necessary to protect employer’s business interests
2. The agreement cannot be excessively severe or oppressive in restricting an employee’s ability to find work
3. The agreement cannot violate Virginia public policy

In 2020, a new Virginia law banned non-compete agreements completely for low wage employees. Low wage is any worker who’s weekly earning is less than the average weekly wage in Virginia.

What Are the Legal Requirements for a Virginia Employment Contract?

Employment contracts in Virginia can be written or verbal and there is no required formant for the contract. Due to the lenient legal requirements for employment contracts, employers should cautious when corresponding with employees or making promises. An informal conversation or even text message could create a binding employment contract even if the employer did not mean to create an agreement.

Employment handbooks and manuals can also create a contractual relationship and override “at will” employment law. Employers should avoid including promises in their manuals or any language that refers to the employee as “permanent”.

Types of Virginia Employment Contracts

There are several types of employment contracts used in Virginia including:

• Permanent employment. An indefinite contract where an employee is hired to work for a company until the employee no longer wishes to work or the employee is terminated in accordance with the contract provisions.
• Fixed term employment contract. A contract that has an agreed upon start date and end date. The end date can be the completion of the task or project laid out in the contract.
• Independent Contractor agreement. Used for contractors and freelancers who are hired by an employer but are not employees of the company.
• Confidentiality agreement. Sometimes called a non-disclosure agreement, this restrictive covenant prevents the employee from releasing valuable information about the business.
• Non-compete agreement. Protects the employer by limiting the employee from working for competitors or creating a competing business within a certain number of years or within a certain geographic boundary. This clause must follow certain legal requirements to be enforceable.

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