The Commonwealth of Virginia was a leader in the preventative health and regulatory responses to the COVID-19 pandemic. Virginia’s rigorous response to the pandemic was characterized by its first-in-the-nation mandatory occupational health and safety rules for COVID-19 countermeasures. Although these regulations assumed permanent status in January 2021, they have now been rescinded as COVID-19 moves from pandemic to endemic status. Special federal rules remain in place for healthcare workers and certain federal employees.

As of August 2022, Virginia was reporting a 20.1% positivity rate in PCR testing and that 93% of the adult population had received at least one vaccine dose. Both deaths and new cases are sharply down from the winter of 2021–22.

Virginia remains fortunate not to be a trigger-point for incidents of police-community violence, but the Commonwealth’s status as a southern state and the presence of Richmond, capital of the Confederacy, means that “Black Lives Matter” (BLM) protests excite passions. As far back as August 2017, the “Unite the Right” rally in Charlottesville, which was triggered by attempts to remove Confederate monuments from a public park, resulted in three deaths and over 30 non-fatal serious injuries; one protestor who drove his car into a group of counter-protesters, killing one, was sentenced to life in prison plus 419 years.

The removal of Confederate monuments and the renaming of streets, schools, and buildings remain the focus of popular attention in Virginia. The memorial to Robert E. Lee was finally removed from Monument Avenue in Richmond, the erstwhile capital of the Confederacy, in September 2021; it required two Virginia Supreme Court decisions to permit the removal. All of the remaining monuments to Confederate leaders are now gone from Monument Avenue.

The “Me Too” movement and the “BLM” movement prompted a radical sea change in Virginia employment law in 2020. See 4.3 Discrimination, Harassment, and Retaliation Issues, 6.2 Discrimination, Harassment, and Retaliation Claims and 6.7 Possible Relief.

The Commonwealth of Virginia has a vibrant economy, based on hi-tech companies, an innovative government-contracting sector and a variety of complementary businesses. Although it has recently ceded its “Best In the Nation for Business” designation, it remains one of the top three states in the United States for pro-business climate.

Virginia is one of the top ten states in the nation in median household income. Three of the six wealthiest counties in the nation are in Virginia. Unemployment in Virginia is consistently lower than the national average – and gasoline prices (a frequent media concern) are almost always substantially below the national average.

The Dulles Technology Corridor rivals Silicon Valley in hi-tech pursuits – 70% of the globe’s internet traffic flows here. The Northern Virginia Technology Council is the largest technology council in the USA. A number of leading businesses and government-business partnerships in this area focus on artificial intelligence development, including work with the Defense Advanced Research Projects Agency (DARPA), which has its headquarters in Virginia. Virginia is home to the Internet Security Alliance, the nation’s premiere private-sector initiative for a sustainable and effective cybersecurity regime.

Hampton Roads is home to the only facility in the world capable of designing and building nuclear supercarriers. CVN 80, the new USS Enterprise, was laid down here in 2022 and is scheduled to be launched in 2025. Next on track is CVN 81 (USS Doris Miller, the first carrier named after an African-American enlisted man). The Hampton Roads area is home to the headquarters of the Allied Command Transformation, the only North Atlantic Treaty Organization (NATO) headquarters in the western hemisphere.

Politically, Virginia has been trending purple. Both of Virginia’s US Senators are Democrats, but the Republicans captured the state offices of governor, lieutenant governor, and elected attorney general. The General Assembly is balanced on a hair point; when governor and both houses of the legislature were Democratic, in 2020, the state saw an explosion of pro-employee employment legislation. None of this has been repealed by the current Republican administration, but it is unclear how vigorous government enforcement will be.

Virginia has been a right-to-work state since 1946. A recent attempt to add the right-to-work principle to the Virginia Constitution failed, but there is no prospect that the statute will be repealed any time soon, even with a newly Democratic state legislature.

Bureau of Labor Statistics estimates for 2021 suggest that about 4.8% of Virginia’s private workforce is unionized, a slight increase from 4.4% the prior year. The BLS cautions, “The onset of the pandemic in 2020 led to an increase in the unionization rate for the nation due to a disproportionately large decline in the number of nonunion workers compared with the decline in the number of union members. The decrease in the national rate in 2021 reflects a large gain in the number of nonunion workers and a decrease in the number of union workers.” Yet Virginia’s unionization rate remains profoundly below the US average and in the bottom tier of the states.

Virginia has no state-level agency analogous to the federal-level National Labor Relations Board (NLRB). The Virginia Department of Labor and Industry has no general labor or union-related jurisdiction.

Virginia is subject to nationally applicable NLRB rules and regulations. Under the Trump administration, the NLRB reassessed and reversed the many Obama-era holdings. However, the Biden NLRB has announced guidelines to move aggressively towards a pro-union stance.

As of July 2022 (the most recent official figures available) Virginia’s unemployment rate has declined to 2.7%, well-below the US national unemployment rate of 2.7%. The labor force participation rate for Q2 2022 was 63.5%, and the number of employed Virginians continues to rise. In Virginia, there are fewer unemployed workers than current job openings.

Involuntary separations as a proportion of all job terminations in Virginia in 2022 were down 25% from 2021 (Second Quarter statistics), indicating that more and more employment terminations are initiated voluntarily by the employees, rather than by the employers. This increase in workforce mobility (and departure from the workforce) has led to increased efforts by employers to retain current workers. In many sectors, bonuses, wage increases, and – to a very large extent – offers of telework have been used by employers to make positions more attractive and less prone to turnover.

Notwithstanding the current strong employment picture in Virginia, the Commonwealth was hit hard by the resignations of the pandemic. During the calendar year 2021, Alaska, Ohio, and Virginia were the three states with the greatest rate of voluntary employee departures.

Employment at Will

Virginia has a firm commitment to the doctrine of at-will employment. In the absence of a contract setting the length of the employment relationship or restricting the reasons it may be terminated, every employer has the right to terminate the relationship at any time, for any (lawful) reason, or for no reason at all, upon reasonable notice.

Under Virginia law, the concept of “reasonable notice” has no temporal factor; the only question is whether the notice reasonably communicates to the employee that she or he has been fired. Virginia did not recognize the tort of “wrongful termination of employment in violation of public policy” until 1985. The first Virginia Supreme Court decision to hold that a firing based on race or sex was “wrongful” did not occur until 1994, and it was promptly reversed by statute (but see 4.3 Discrimination, Harassment, and Retaliation Issues on expansive new Virginia laws in this area).

Virginia will analyze any claim of an oral agreement for employment consistent with the Statute of Frauds. Only oral agreements that can be performed (not merely breached) within one year are enforceable. Oral employment contracts should never be used for mid-level or upper-level Virginia employees.

“Independent Contractor” Issues

In 2020, the Virginia legislature completely rewrote Virginia law regarding the classification of workers as “employers” or as “independent contractors” and provided workers with concrete remedies previously lacking to challenge an employer’s designation. While a number of court cases have been filed evoking the new law, its impact on Virginia employers remains undefined.

Under Virginia law, any person who “performs services for any employer for remuneration” is presumed to be an employee, and not an independent contractor, for purposes of Virginia workers’ compensation, unemployment and labor and employment law. The presumption may be overcome, but only if the employer proves that the person qualifies as an independent contractor under the “most recent [federal Internal Revenue Service] guidelines”. The burden of proof is on the employer. This general definition should make Virginia employers much more careful when attempting to claim their workers are not “employers”.

A plethora of Virginia laws now give this presumption of “employment” real teeth, as follows.

• Any person who believes that he or she has been retaliated against for reporting or threatening to report misclassification to an appropriate authority now has a civil right of action to sue his or her employer in court. The Commissioner of the Department of Labor and Industry may also impose civil penalties for retaliation.
• An employee who believes she or he has been misclassified may bring a civil action against the employer in court. A successful employee may recover lost wages, salary, employee benefits, compensation for expenses that would have been covered by insurance, compensatory damages and attorney’s fees and costs.
• It is now unlawful even to ask a worker in Virginia to enter into a contract that mischaracterizes an employment relationship as an “independent contractor” relationship.
• An employer who intentionally misclassifies a worker as an “independent contractor” rather than an “employee” may be debarred from doing business with the Commonwealth of Virginia. Each of the affected agencies (Workers Compensation Commission, Virginia Employment Commission, and others) may separately impose penalties upon an employer for misclassifying employees as independent contractors. Moreover, such agencies now share information with one another regarding instances of misclassification.
• Construction contracts in certain circumstances are now deemed to provide for joint and several liability amongst general contractors and subcontractors for worker misclassification.

Virginia imposes no state-law requirements relating to immigration or foreign worker issues.

Virginia’s workforce includes a large foreign-born component. One in eight Virginia residents are foreign-born, as are one out of every six Virginia workers. The most prevalent type of employment for foreign-born Virginians is as “professional, scientific, and technical employees”.

In general, Virginia employers are familiar with temporary work visas and the relevant federal programs. Four Virginian metropolitan areas are among the top jurisdictions for the number of H-1B visas issued each year.

Although certain extractive industries (eg, coal) and manufacturing sectors (eg, shipbuilding) have union-based activities, collective bargaining and union activities do not occupy a substantial place in Virginia employment law. Approximately 96% of Virginia employees do not belong to a union.

Virginia Law Constraints on Interviewing and Hiring

A number of Virginia cities and counties have adopted local ordinances that restrict inquiries about criminal history, or prohibit those inquiries until a later stage in the interview process. “Ban-the-box” ordinances are in effect in Arlington, Norfolk, Newport News, Alexandria, Richmond, Petersburg and Portsmouth. The validity of those local ordinances is open to question, because Virginia adheres strictly to the “Dillon Rule”: cities and counties may only exercise regulatory power when it has been granted expressly by the Commonwealth. There is no state-wide “Ban-the-box” rule for private employers. Nevertheless, private employers are well advised to comply with all such local ordinances.

Virginia has decriminalized possession of marijuana and personal use. Private employers are prohibited from asking an applicant for employment about arrests, charges, or conviction for simple possession of marijuana. An applicant responding to a general question about criminal convictions may decline to identify convictions for marijuana possession. An employer who intentionally asks whether an applicant has been convicted of marijuana possession commits a criminal offense punishable by a possible fine of USD2,500 and up to 12 months in jail.

Virginia has not enacted any restriction on inquiries regarding salary history for private employers.

Virginia has not enacted any specific state-level legislation on the use of credit checks in the employment application context.

Questions eliciting information that might be used to discriminate in hiring should be avoided. Since Virginia law includes “childbirth or related medical conditions” and “marital status” as protected classifications, employers in Virginia would do well to avoid questions regarding childbirth, related medical conditions, or marital status. The 2020 amendments to this law added gender identity and sexual orientation to the group of protected characteristics, and explicitly include characteristics associated with a particular race (such as hair style) under the rubric of race discrimination. Subjects touching on these matters must be avoided.

Employers are precluded from requiring an applicant to respond to questions about his or her sexual activities in a polygraph test unless such activities resulted in the applicant’s conviction under a Virginia criminal statute.

Virginia law prohibits an employer from making an employee or prospective employee pay for any required medical examination.

Federal Law Constraints on Interviewing and Hiring

Pursuant to the federal Age Discrimination in Employment Act, it is inappropriate to ask an applicant age-related questions in the hiring process. Pursuant to Title VII of the federal Civil Rights Act, it is inappropriate to quiz prospective employees on plans to have children, on their religious observances or preferences, or on their ancestry. The federal Americans with Disabilities Act makes it inappropriate to ask an applicant about a mental or physical impairment, or to require a medical examination of an applicant prior to a conditional offer of employment.

Impressionistically, few Virginia employers have made substantial use of algorithmic programs to assist in the evaluation of employment candidates. Frankly, the use of any new technology or procedures to weed out candidates is not expected to take root unless and until the fruits of the “Great Resignation” are no longer with us (see 1.6 The Great Resignation and Workforce Changes for further detail); it is difficult to increase selectivity when candidates are at a premium.

Illinois has instituted a disclosure program for employers who use AI in the hiring process; New York City requires disclosure and the use of independent testing to verify the absence of bias. Maryland regulates employer use of facial recognition software during interviews. Virginia, on the other hand, has no state-level restriction on the use of AI in the hiring process.

Dangers inherent in use of AI for candidate recognition, recruiting, or screening derive from the “black box” nature of most AI providers and the likelihood that one or more of the variables considered by the algorithm may create a disparate impact on a protected group. The adverse impact on certain demographic groups by using arrest records as an employment-screening tool is well-known and presumably accounted for by AI providers; however, many other variables (church attendance, social media memes, music downloads, even food preferences) may be associated more with a certain age, race, color, sex, or sexual orientation. Employers are well-advised to obtain full transparency from providers as to factors considered by any AI tool.

Low-Wage Employees May Not Be Bound to Covenants

Virginia employers are prohibited from entering into, enforcing, or threatening to enforce an agreement that restrains, prohibits, or otherwise regulates post-employment competition by a low-wage employee, currently defined as anyone who earns less than the median salary for the Commonwealth of Virginia, currently set at USD67,080 per year. The prohibition governs only restrictive covenants entered into on or after July 1, 2020. The new prohibition does not affect independent contractors, and compensation through commissions, incentives, and bonuses is considered in determining wage levels.

Virginia law creates a private right of action against anyone who attempts or threatens to enforce a prohibited covenant against a low-wage employee. The employee may recover lost wages, “damages”, liquidated damages, and attorney’s fees and court costs. The Commonwealth has the right to assess a civil penalty against such an employer in an amount up to USD10,000. The prohibition is accompanied by an employee-notice, posting provision.

The law provides that it does not restrict the ability of employers to enter into agreements with low-wage employees restricting their post-employment use or disclosure of confidential information.

General Law Regarding Restrictive Covenants

Despite the routine recitation that non-competition covenants are “disfavored” and “strictly construed”, they are nonetheless routinely enforced. Virginia law on the enforcement of covenants is judge-made; no state statute addresses the enforceability of such a covenant for other than low-wage employees.

Virginia law does have several idiosyncrasies – for example, the following.

• Virginia does not “blue pencil” or modify non-competition agreements. Virginia courts will not enforce a covenant in part, or modify any geographical or temporal term of the restriction.

• Virginia courts generally engage in a searching inquiry regarding the degree to which the covenant is tailored to protect the legitimate business interest of the employer. Courts routinely decline to enforce covenants that purport to restrict competition in overly broad industries such as “motors” or “sales”.
• Covenants entered into between businesses are not disfavored in Virginia, and there is some decisional authority to suggest that a similar principle should be used to evaluate covenants entered into as part of a sale of business transaction or by individuals sophisticated and experienced in business.
• Covenants may be imposed by a Virginia employer during the course of at-will employment. Virginia does not require separate consideration or imposition of the covenant at the beginning of employment, reasoning that continued at-will employment is sufficient consideration. Employers should note that continued employment would only be deemed sufficient consideration if an employee who fails to execute such a covenant would be terminated. Otherwise, “continued employment” may be deemed illusory. 
• Virginia courts are much more willing to enforce non-solicitation agreements (whether prohibiting solicitation of former co-workers or of former clients) than true non-competition agreements.

Every restrictive covenant must be sharply drafted to be no broader than necessary to protect the legitimate business interest of the employer, while permitting the former employee to earn a living. Facts are important, and the geographic restriction may range from half a mile (in a reported Virginia Supreme Court opinion) to worldwide, depending on the competitive presence of the former employer. Generally speaking, Virginia courts have enforced non-competition agreements governing individuals with lengths of up to two years, and agreements governing companies (or individuals in a sale of business transaction) with lengths of up to five years.

In recent years, the federal Department of Justice has exhibited renewed interest in pursuing companies that enter into agreements with one another prohibiting the poaching of employees. Except in certain specific contexts, such agreements violate both Virginia and federal antitrust law.

Medical Privacy Rights

Federal law, and in particular the Americans with Disabilities Act of 1990, has for many years restricted employers from making medical-related inquiries of employees or applicants. The COVID-19 pandemic, and guidance from the U.S. Equal Employment Opportunity Commission (EEOC) that the pandemic creates a “direct threat” of imminent harm to co-workers, seemingly gave employers more leeway in this area during the continuing pandemic emergency. A recent USD10 million settlement, in favor of employees, however, will likely embolden employees who were terminated for refusing vaccines based on religious exemptions.

Employers must be careful to confine inquiries and examinations to those directly related to reducing the threat of COVID-19. For example, during the pandemic emergency it is permissible to ask an employee whether she or he has symptoms of COVID-19 (such as unexplained headache, persistent unexplained fever of 100.4°F or higher, or unexplained loss of sense of smell or taste), in order to ensure employees ill with COVID-19 do not come into the workplace.

Medical or mental/emotional impairment questions unrelated to the transmission of COVID-19 still violate the Americans with Disabilities Act. Employers must also remember that a separate federal law, the Genetic Information Non-Discrimination Act (GINA) generally prohibits an employer from asking for medical information about an employee’s family members (save in specifically exempted circumstances such as a request for leave under the Family and Medical Leave Act).

General Right to Privacy

Virginia state law does not provide for any general right of privacy in favor of workers as against a private employer. It is prohibited, by statute, to use the name or image of an individual for commercial purposes without the individual’s permission; employers using employee photographs or names in promotional materials should first seek such permission.

Data Privacy

The Virginia Computer Crimes Act provides Virginia employers with a strong tool for ensuring data privacy. The Act makes it unlawful for a person (including an employee) to use a computer or computer network without permission:

• to commit computer fraud, defined as larceny, embezzlement, or obtaining property by false pretenses;
• to commit computer trespass, which includes using a computer or network to alter or erase any data; or
• to commit computer invasion of privacy, which is defined as intentionally examining any employment, salary, credit or any other financial or identifying information, knowing the person does not have the authority to review the information.

However, a US Supreme Court decision in June 2021 likely will be looked to by Virginia courts in interpreting this law. That decision, interpreting the federal cognate of Virginia law, held that an unlawful purpose did not mean an employee who had access to a computer system acted “without authorization”. Generally, emails between an employee and the employee’s private lawyer, sent over the employer’s computer, can be accessed and reviewed by the employer and lose their privileged status. Virginia employers should apprise their employees of these principles in a written policy expressly delimiting the authority any employee has to access and use the employer’s computer system. Virginia employers also should advise their employees, in a written policy, that the employee has no expectation of privacy in any communication or data sent over a computer or network owned by the employer.

Virginia has adopted the Uniform Trade Secrets Act in almost all of its particulars. Virginia law varies from the Uniform Act in that it includes unauthorized use of a computer or computer network as one of the “improper means” by which a trade secret may be misappropriated. Virginia law limits the award of punitive damages to the lesser of twice actual damages, or USD350,000. Virginia courts have held that mere acquisition of a trade secret, even without using that trade secret, constitutes unlawful misappropriation.

In cases involving theft or misuse of confidential information where the information does not rise to the level of a trade secret, Virginia courts routinely enforce contracts by which employers require employees to maintain the confidentiality of information.       

The Virginia legislature has been influenced decisively in the field of employment law by the combined force of the “Black Lives Matter” and “Me Too” movements. Virginia also has become the first state in the South to enact comprehensive employment protection for the LGBT+ community.

The Virginia Values Act

Virginia law on discrimination changed dramatically on July 1, 2020, when the new “Virginia Values Act” went into effect. Before this date, the Virginia Human Rights Act broadly prohibited discrimination in the termination of employment, but the remedies available under that law were so narrow as to be meaningless. This has undergone a sea change, and the Virginia Values Act now makes a panoply of remedies – broader than under federal law – available to employees. See 6.2 Discrimination, Harassment, and Retaliation Claims.

With respect to the types of activities that may be unlawful, Virginia law imposes the following:

• Virginia law covers a broad range of protected categories, including race, color, religion, national origin, sex, pregnancy, childbirth or related medical conditions, age, marital status, sexual orientation, gender identity, disability (included as of July 1, 2021), or status as a veteran;
• the term “race” is defined broadly, to include “because of” or “on the basis of” traits “historically associated” with race, including hair texture, hair type, and protective hairstyles such as braids, locks and twists;
• the term “sex” is defined broadly, to include “because of” or “on the basis of” pregnancy, childbirth, or related medical conditions, including lactation;
• the term “gender identity” is defined broadly, to include gender-related identity, appearance, or other gender-related characteristics of an individual, with or without regard to the individual’s designated sex at birth – “sexual orientation” includes a person’s “actual or perceived” heterosexuality, bisexuality, or homosexuality; and
• the law requires “reasonable accommodation” for pregnancy, childbirth, related medical conditions, and lactation.

In contrast to prior law prohibiting only discriminatory discharge, the law now prohibits any discrimination in the terms and conditions of employment – that is, also prohibits harassment – for employers with 15 or more employees. For employers with more than five but fewer than 15 employees, only a discriminatory discharge is covered. Special rules govern (i) age discrimination, where the Virginia law covers only employers with more than five but fewer than 20 employees, and (ii) disability discrimination, where the Virginians with Disabilities Act remains unchanged.

The Virginia Values Act also makes retaliation against an employee, whether for opposition to an unlawful practice or for participation in a proceeding, unlawful. Former state law had no provision barring retaliation.

Diversity Training

The publicity surrounding the “Me Too” movement and, particularly, the “Black Lives Matter” movement have made Virginia employers and employees much more sensitive to all forms of mistreatment and friction in the workplace, including unintentional and implicit bias issues. Virginia courts have not yet undertaken to address these issues in litigation in any substantial manner, but implicit bias and diversity training has become a commonplace part of “harassment avoidance” training for companies.

Virginia law does not mandate any harassment or discrimination training, although it remains best practice to conduct periodic training for all levels of company employees, from line workers through the C-suite.

Virginia was the first state in the nation to enact a comprehensive mandatory regulatory occupational safety and health scheme in response to the COVID-19 pandemic. The Virginia Department of Labor and Industry published an Emergency Temporary Standard (ETS) which became effective on July 27, 2020, and thereafter became a Final Standard. The Virginia Occupational Safety and Health (VOSH) Program has been fully approved by the federal Occupational Safety and Health Administration since 1988. VOSH is administered through the Virginia Department of Labor and Industry. Following the inauguration of Republican Governor Glenn Youngkin, the Virginia Safety and Health Codes Board voted to rescind the Final Standard.

With respect to non-pandemic issues, VOSH has adopted the majority of federal health and safety standards under the Occupational Safety and Health Act, but also has adopted unique Virginia health and safety standards in a number of areas, including:

• telecommunications industry standards for work in confined places and general approach distances for electrical hazards;
• overhead high voltage line safety;
• medical services and first aid availability in construction; and
• field sanitation in agriculture.

Virginia employers are also subject to the requirements of the federal Occupational Safety and Health Act, including the “General Duty Clause” that requires all employers to provide a safe workplace.

Virginia now has a minimum wage law that requires payment of an hourly rate higher than the federally established minimum wage. The minimum hourly wage for employees in Virginia is currently USD11.00 and will rise on a periodic basis until it reaches USD15 per hour on January 1, 2026.

Virginia imposes few other state law requirements on compensation and benefits.

Federal requirements to comply with the Employee Retirement Income Security Act (ERISA) and the Comprehensive Omnibus Budget Reconciliation Act (COBRA) are fully in force in Virginia. While Virginia does have a “mini-COBRA” statute in place, the Commonwealth has not passed a “mini-ERISA”.

Policies, handbooks, and manuals provided to employees by Virginia employers may include a brief summary of ERISA and COBRA rights, but should always include a disclaimer that the terms and conditions of any ERISA benefit are always governed by formal Plan documents, and that COBRA benefits are governed by law. Policy, handbook, or manual descriptions should always state that in the event of any difference between formal Plan documents and the manual, the terms of the Plan will be dispositive. Policies, handbooks, and manuals always should contain a disclaimer that they may be changed at any time, and do not create contractual rights. When an employer wishes to bind a key employee to an enforceable duty not otherwise imposed by law, a contract should be used.

Forum and Procedural Issues

Both federal and state courts in Virginia pride themselves on the rapid resolution of disputes, although during the height of the pandemic, various courts imposed court closures, suspended jury trials, and delayed proceedings. Courts are working through the backlog of cases.

The courts in the Eastern District of Virginia are the fastest federal courts in the country, with a median time between the initial filing of a complaint and a trial on the merits of approximately 13 months. The federal court is known nationwide as the “Rocket Docket”. State courts have emulated the speed at which the federal court acts, particularly in more urban jurisdictions, with an aspirational time from filing to trial of one year or less. The quality of the judges in both federal and state court is unusually high.

The federal courts in Virginia have a free, voluntary judicial mediation program. The parties to a case may engage in a prompt and confidential mediation session with a federal magistrate judge in an attempt to settle the case. In state court, many but not all jurisdictions in Virginia offer free and occasionally mandatory mediation of claims, usually overseen by a retired state court judge.

Virginia has adopted the Uniform Arbitration Act, and both state and federal courts almost always enforce arbitration agreements under either the Virginia or the Federal Arbitration Act.

Employers in Virginia should be aware that the Virginia state court system has a number of idiosyncrasies. For the first time, effective January 1, 2022, Virginia will allow an appeal as of right in all civil cases. It remains to be seen how the actions of the Court of Appeals (whose jurisdiction had previously been limited to criminal, workers’ compensation and unemployment, and family and domestic matters) will affect civil trial practice in Virginia. Appeals to the Virginia Supreme Court are mostly discretionary (with the Court usually declining plenary briefing and argument in some 90% of civil cases). Certain aspects of Virginia civil court practice are remnants of an earlier time: one may “interpose a demurrer” or “crave oyer”. Perhaps most importantly, summary judgment before trial – commonplace in employment cases in federal court – is all but unobtainable in Virginia state court, due to restrictions on the materials that can be used to support such a motion in a case involving an individual as one of the parties.

Termination for Cause or No Cause

Due to Virginia’s strong adherence to the principle of at-will employment, state law has not developed any generally accepted definition of “cause” for the termination of employment. In the absence of a collective bargaining agreement or a written employment contract, no cause is ever needed for a termination.

Employees discharged for cause (serious misconduct connected with employment) may be disqualified from receiving benefits from the Virginia Employment Commission under the Virginia Unemployment Compensation Act. “Misconduct” is a higher standard than mere inability to perform the job, and includes, for example, a positive drug test, an intentionally false or misleading statement regarding prior criminal history made in an employment application, material insubordination, or chronic absenteeism in deliberate violation of a known employer policy. In addition, individuals who leave work voluntarily without good cause are disqualified for benefits.

Virginia employers are subject to the federal law requirements of the Worker Adjustment and Retraining Notification Act (WARN). Virginia has no state-level counterpart to WARN.

Virginia law does not impose any requirement to pay severance pay to an employee leaving employment.

Virginia law does not impose any requirement to pay an employee for accrued but unused sick leave, or for accrued but unused vacation leave or paid time off (PTO). However, an employer may assume such an obligation by engaging in a consistent practice of paying for such accrued time off, or by promulgating a policy that such payments will be made (even if the policy is in a manual or handbook that contains an appropriate non-contractual disclaimer). In such cases, the accrued but unpaid time is treated as unpaid wages. See 6.3 Wage and Hour Claims. Virginia employers should avoid making any unconditional representations about the payment for unused time off, and should limit the carry-over of accrued but unused leave from year to year.

Virginia state law imposes no limit on the ability of a Virginia employer to limit or eliminate the carry-over of unused leave.

Virginia has no state-level law requiring the accrual of sick leave, or any form of paid time off, on any particular basis.

It is commonplace for Virginia employers to obtain releases from departing employees in exchange for some form of additional consideration, such as otherwise-absent severance benefits. It may be best practice to obtain a release from any employee who is terminated involuntarily. Under Virginia law, the sine qua non for the enforcement of any release signed by a former employee is that the employee receives some additional payment to which the employee otherwise would not be entitled by law. If such additional consideration is present, Virginia courts will enforce the release under almost all circumstances.

Wrongful Termination Torts

Only three types of employment termination have been held “wrongful” under Virginia common law:

• where an employer fires an employee for exercising a right conferred on the employee by state statute (for example, terminating an employee who is also a stockholder for not voting her or his share of stock as the employer directed);
• where an employer fires an employee for the employee’s refusal to commit a crime; and
• where an employer fires an employee in violation of a clearly articulated public policy, when the public policy violated by the employer was explicitly expressed in a state statute, and the employee was clearly a member of that class of persons directly entitled to the protection enunciated by the public policy.

The common-law cause of action for wrongful termination in Virginia is a tort claim. Compensatory damages (including damages for emotional distress) and punitive damages can be awarded.

The broad expansion of Virginia employment law as of July 1, 2020 in the field of wage and hour law, harassment and discrimination law, general whistle-blower law, and elsewhere has fueled discussion as to whether some or all of the new statutes may also support common law wrongful termination claims.

Common-Law Claims Arising during the Termination Process

Several emerging common-law issues have confronted Virginia employers.

Successful common-law defamation claims have been made against employers, based on performance counselling documents or termination documents. While the Virginia Supreme Court has been careful to parse out non-actionable “opinion” from actionable “false factual statements”, the ability of an employee to bring a claim against her or his employer for defamation based on internal performance documents has surprised many employers. Under Virginia law, a false statement that is derogatory of the subject’s ability to perform her or his trade or profession is per se defamatory; no proof of damages is required.

Employees have also been successful in asserting claims in Virginia courts under the insulting words statute (known elsewhere as fighting words laws) against supervisors in lieu of making hostile work environment claims under federal discrimination laws, which subject plaintiffs to summary judgment in federal court.

Virginia recognizes common-law claims against employers based on the theory of negligent hiring of an employee and negligent retention of an employee (but not yet negligent supervision). The gravamen of each claim is knowledge by the company that a particular employee is likely to cause a particular type of harm, coupled with either the hiring or retention of that employee despite the known risk of harm.

Virginia recognizes the common-law torts of negligent infliction of emotional distress and of intentional infliction of emotional distress. These common-law claims are often asserted in employment litigation, but are seldom successful in Virginia.

Written employment contracts are most often found at the higher levels of management, employees who work regularly with highly confidential information, professionals, and employees on more complicated commission arrangements. Virtually all non-managerial Virginia employees have no written employment agreement and are terminable at will.

Employees who assert a claim for breach of a written employment contract often fare well in Virginia courts. Virginia does not, however, allow the award of punitive or emotional distress damages in contract cases.

Claims against employers based on the violation of handbook policies, where a proper “non-contractual” disclaimer is contained in the handbook, are not successful in Virginia.

Written documentation at all stages of the employment relationship is strongly recommended, although not required by law in Virginia. For all employees, an offer letter explaining whether the position is exempt or non-exempt for overtime purposes – stating a starting date, and including a starting compensation amount – is appropriate. Such a letter should contain a disclaimer that it does not alter the at-will status of employment.

Written communications documenting the termination of the relationship are recommended. The termination letter should not be detailed; it is often the case that all of the reasons for termination are not mustered at this stage or known to the HR professional communicating the firing. An employer who raises unarticulated reasons for termination in a later proceeding may, under federal law, be held to have created evidence of pretext in the termination, or even evidence of discriminatory intent.

The existence of written position descriptions is not required by any Virginia law, but they are generally useful. Written position descriptions should include the “essential functions of each position”, a term of art for individuals seeking protection under the federal Americans with Disabilities Act.

The combined effect of the “BLM” and “Me Too” movements in Virginia resulted in a fundamental rewriting of Virginia anti-discrimination law in 2020. Both the characteristics protected from discrimination (see 4.3 Discrimination, Harassment, and Retaliation Issues) and the remedies for discrimination have been expanded greatly.

Virginia discrimination law bans both discrimination in the termination of employment, and also (for employers with more than five employees) harassment and other forms of discriminatory treatment in the terms and conditions of employment.

Virginia statutes now offer genuine remedies to those who have suffered discrimination, retaliation, or harassment, as detailed below.

• The Virginia Division of Human Rights (DHR), a part of the Office of the Attorney General, investigates claims of discrimination and may bring suit. The DHR role is analogous to that of the EEOC in federal law claims. In a suit by the Commonwealth, an employer may be subject to a fine of USD50,000 for a first offense and USD100,000 for a subsequent offense.
• Individuals who allege that they have suffered discrimination in employment may now bring a civil suit to recover damages. Punitive damages are available up to the general Virginia statutory limit of USD350,000.
• In contrast to federal law, general compensatory damages are recoverable under Virginia law without any statutory limit.
• Successful plaintiffs may recover attorney’s fees and costs, which may be substantial.
• Employees may recover full damages where a discriminatory factor is a motivating factor for any employment practice, even though other factors also motivate the practice. This is a much broader remedy than federal law, which limits recovery in such “mixed motive” cases.

The Virginia Wage Payment Act

In 2020, the Virginia Wage Payment Act was amended to provide for a private right of action. The law generally requires that:

• all wages due to an employee should be paid on time;
• nothing other than tax payments may be withheld from wages without the employee’s written and signed permission;
• no forfeiture may be imposed except on an executive employee; and
• the last wages due an employee must be paid, after termination, on the next regularly scheduled payday.

None of this is new. What is new is that Virginia law now allows an employee a private right of action to sue for unpaid wages – “wage theft”. A successful employee may be awarded unpaid wages plus double damages as liquidated damages, or treble damages if the violation was knowing. Attorney’s fees and costs may be awarded to the successful employee.

Although Virginia law generally does not afford any right to a class action, the 2020 amendments to the wage payment law allows employees and former employees to sue collectively, in the same manner as a collective action under the federal Fair Labor Standards Act (FLSA).

The Virginia Overtime Wage Act

In 2021, continuing on its pro-employee blitz, the General Assembly passed the Virginia Overtime Wage Act (VOWA), with an effective date of July 1, 2021. The new law was somewhat akin to the federal FLSA in requiring that a non-exempt employee receive overtime pay at the rate of one and-a-half times the regular rate for each hour over 40 that person works in a workweek. However, there were quite a few areas where the VOWA diverged from the FLSA, creating confusion for many employers.

A year later, the General Assembly rolled back many provisions of the VOWA, realigning the VOWA with many of the obligations and exemptions of the FLSA. These revisions became effective on July 1, 2022.

Although the revisions largely aligned the VOWA with the FLSA, there are a few important differences:

• employees have access to broader damages for overtime violations than under the FLSA, including liquidated damages equal to the amount of unpaid wages, as well as treble damages if the court determines the employer “knowingly failed to pay wages” to the employee (Va. Code § 40.1-29(J));
• the statute of limitation is three years under the VOWA compared with the normal two-year statute of limitation found in the FLSA (where a three-year limitation exists for willful violations) (Va. Code § 40.1-29(L)); and
• the VOWA does not allow an exemption for derivative carriers (available under the FLSA). (Va. Code § 40.1-29.3).

Effective July 1, 2020, Virginia enacted a general whistle-blower protection act. It creates a private right of action in favor of any employee who has been discharged, disciplined, threatened, penalized or discriminated against because that person or a person acting on behalf of the employee in good faith:

• reports a violation of any federal or state law or regulation to a supervisor or to any governmental body or law-enforcement official;
• is requested by a governmental body or law-enforcement official to participate in an investigation, hearing, or inquiry;
• refuses to engage in a criminal act that would subject the employee to criminal liability;
• refuses an employer’s order to perform an action that violates any federal or state law or regulation and the employee informs the employer that the order is being refused for that reason; or
• provides information to, or testifies before, any governmental body or law-enforcement official conducting an investigation, hearing, or inquiry into any alleged violation by the employer of federal or state law or regulation.

A successful claimant may recover compensation for lost wages, benefits, and other remuneration, together with interest, as well as reasonable attorney’s fees and costs. The statute does not authorize disclosure of privileged information or confidential information established by law (or the common law), and does not protect the knowing or reckless disclosure of false information.

Virginia enacted anti-retaliation provisions for a number of other employee-protection statutes:

• discrimination and harassment matters under the Virginia Values Act/Virginia Human Rights Act, which now includes an anti-retaliation provision (see 4.3 Discrimination, Harassment, and Retaliation Issues);
• wage payment matters under the Virginia Wage Payment Act, which now contains an express anti-retaliation provision (see 4.3 Discrimination, Harassment, and Retaliation Issues);
• Virginia has created an express anti-retaliation private cause of action for reporting any noncompliance with the “employee/independent contractor” provisions of the law (see 2.1 Defining and Understanding the Relationship); and
• a new and separate Virginia statute makes it unlawful for an employer to retaliate against an employee who has discussed or disclosed information relating to wages and compensation (except for those employees who administer wage and compensation matters for the company) – this does not create a private right of action, but does impose civil penalties of USD100 per violation.

Most Virginia employers have already incorporated the lessons and language from the “BLM” and “Me Too” movements into employee and managerial training courses. Over the past two years, more employers have also required employees and managers to undergo training more broadly in the benefits of diversity in the workplace, not strictly for the avoidance of claims under various statutes but to enhance employee satisfaction, corporate loyalty, and civic values.

Virginia law does not generally permit class action claims.

As of July 1, 2020, collective actions for unpaid wages have been permitted under the Virginia Wage Payment Act. Effective July 1, 2021, the Virginia Overtime Wage Act provides for collective actions for unpaid overtime wages.

The most common multiple-plaintiff action seen in Virginia is the federal court collective action claim under the federal Fair Labor Standards Act. Such claims are not at all uncommon in Virginia and have been increasing in frequency in recent years.

Virginia courts routinely enforce class action waivers in arbitration agreements between employee and employer.

Discrimination

Virginia courts are familiar with, and routinely award, the panoply of damages available under the federal anti-discrimination laws. This relief, and more, is now available under Virginia state law for the same conduct.

Punitive damages are allowed in claims under the federal anti-discrimination laws. Under Title VII of the federal Civil Rights Act, as well as under the Americans with Disabilities Act and the Genetic Information Nondiscrimination Act (GINA), the total of compensatory and punitive damages is subject to a dollar-amount limitation. For the largest employers, those with more than 500 employees, this limit on combined compensatory and punitive damages is USD300,000. For employers with 15 to 100 employees, the limit is USD50,000. Attorney’s fee awards, court costs, back pay, and front pay are not subject to these caps.

Some federal anti-discrimination statutes – notably the Age Discrimination in Employment Act, the Equal Pay Act, the Fair Labor Standards Act and the anti-retaliation provisions of the lactational area provisions of the Affordable Care Act – do not permit the award of compensatory damages for emotional distress, or punitive damages. However, those statutes routinely permit the assessment of back pay; in such cases, litigants are somewhat more likely to see an award of front pay, and in cases of willful violation, double damages may be awarded as liquidated damages.

Essentially all federal anti-discrimination and employment law statutes permit the prevailing plaintiff (ie, the employee or former employee) to recover her or his attorney’s fee from an unsuccessful employer. In practice, and as a matter of US Supreme Court direction, awards of fees in favor of successful employer/defendants are extraordinarily uncommon.

Virginia statute makes even more relief available under Virginia-law claims for discrimination, harassment, and retaliation than is available under federal law. There are no dollar-amount limits on compensatory damage claims under the Virginia Values Act, and punitive damages are subject to a USD350,000 limit. See 6.2 Discrimination, Harassment, and Retaliation Issues.

Breach of Contract

In claims for breach of contract under Virginia law, only demonstrable economic damages are available. No punitive damages may be awarded for breach of contract, even if the breach was made in bad faith. No emotional distress or similar general damages may be awarded. While a duty of good faith and fair dealing is implied in most Virginia contracts, that principle has not been extended to the employment law context. In contract cases, however, the parties may include a provision in the contract that shifts attorney’s fees, and permits the prevailing party to recover its attorney’s fees from the unsuccessful party.

Attorney’s fee awards under Virginia contract law are very different from federal statutory fee awards in a number of important particulars. Fee requests under Virginia contracts must be documented with the same rigor as fee requests under federal anti-discrimination statutes. However, federal courts will often award only a portion of the fees demanded by the prevailing employment discrimination plaintiff; it is commonplace to reduce fees for “billing judgment”, unsuccessful unrelated claims, overbilling, lack of success on related claims, and a host of other factors.

Further, Virginia courts (to date, largely in contract cases) generally will award fully compensatory fees regardless of the level of success obtained. In one fairly recent case, the Virginia Supreme Court declined to intervene when a contract-claim defendant, who prevailed on two of the three claims asserted and lost a jury verdict for one dollar on the third claim, was ordered to pay the opponent’s fees in excess of USD700,000. Under the federal discrimination statutes, in contrast, the degree of success is supposed to be the most important single factor in determining an appropriate fee award, and federal courts routinely modify fee requests based on this factor. We do not know whether Virginia courts will follow federal precedent when awarding attorney’s fees under the Virginia Values Act.

Virginia Civil Conspiracy

Virginia employers should also be aware of the Virginia Civil Conspiracy statute, a powerful tool against employees who have engaged in malicious action, concerted with others, to injure an employer’s business. This statute is often invoked in cases where a number of employees agree together to leave a business and begin a competing business. An employer whose business or property is injured by a conspiracy of two or more persons may sue not only for injunctive relief (such as return of purloined company documents), but also for treble the actual damages incurred. The statute also authorizes a prevailing plaintiff to recover all reasonable attorney’s fees and costs incurred.