USA Regional Employment 2019 Second Edition

Last Updated September 30, 2019

Virginia

Law and Practice

Authors



Kaufman & Canoles, P.C. is a business-oriented law firm celebrating its centennial. Practicing from its eight offices across the Commonwealth of Virginia, the firm has one of the largest labor and employment law teams in the state. It counts among its ten members three former chairs of the Virginia Bar Association Section on Labor Relations and Employment Law. The team works closely with the firm's Employee Benefits group and its business and transactional attorneys, first and foremost to counsel clients to prevent problems. Experienced first-chair litigators and jury trial attorneys – a vanishing breed in modern employment law – stand ready to assist at all phases of the process, from administrative agencies through the appellate courts. The firm represents employment-law clients of all sizes and in every industry, from massive shipyards to mid-sized financial institutions to local government and quasi-governmental agencies. True to the firm’s founding principles, it represents employers – and only employers.

The Commonwealth of Virginia has a vibrant economy, based on hi-tech companies, an innovative government contracting sector, and a variety of complementary businesses. 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 stable at 3.0% or lower.

The Dulles Technology Corridor rivals Silicon Valley in hi-tech pursuits. Seventy percent 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 Newport News Shipbuilding, the only facility in the world capable of designing and building nuclear supercarriers. CVN 79, John F. Kennedy, is near completion, and in 2019 the government ordered CVN 80, Enterprise, and CVN 81 (yet-unnamed), both to be built in Virginia. 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.

Virginia identifies as a “purple” state rather than as Republican “red” or Democratic “blue.” Both of Virginia’s US Senators as well as Virginia’s governor, lieutenant governor, and attorney general are Democrats. Both houses of the Virginia legislature, the General Assembly, long have been controlled by the Republicans.

As one would expect from the state that boasts the largest naval base in the world, Virginia has been out in front of the curve in developing innovative technical solutions to issues concerning sea level change. In 2019, the Governor of Virginia appointed a retired US Navy Rear Admiral as Special Assistant to the Governor for Coastal Adaptation and Protection, to examine and foster, in collaboration with industry and academia, technological innovation to create “sea level rise resiliency.” Virginia boasts a Cabinet-level Chief Workforce Development Advisor to the Governor. The Chief Workforce Development Advisor is charged with coordinating state-wide worker training programs and encouraging PPP towards a well-trained workforce.

The “#MeToo” movement and related issues have not made a substantial change in the legal landscape for employment law in the Commonwealth.

Virginia has enacted no state-level restrictions on confidentiality in the settlement of sexual harassment or civil assault cases. There are no state-level laws imposing restrictions on the effectiveness of agreements to arbitrate sexual harassment or assault claims. Neither the scope of the Virginia Human Rights Act nor the remedies available under the state-level Act have been amended.

Virginia does not impose any legal requirement for training employees in harassment avoidance and reporting (as do various states and localities, including California and New York). Over the last few years, mid-sized and larger employers are adopting periodic training regimens voluntarily. It is best practice for Virginia employers to engage in periodic training of employees and managers.

The federal Court of Appeals for the Fourth Circuit has become markedly more employee-friendly over the past few years. The Court, once known as among the most conservative in the USA in employment law issues, has become increasingly accepting of claims brought by employees.

Virginia has been a right-to-work state since 1946. A recent attempt to add the right-to-work principle to the Virginia Constitution, by popular ballot amendment, failed narrowly, but there is no appreciable prospect that the statute will be modified or repealed any time soon.

The American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) estimates 5% of Virginia’s private workforce is unionized.

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 the same nationally applicable NLRB rules and regulations. Since 2017, the NLRB has reassessed and reversed Obama-era holdings. Prospective employers in Virginia should be aware that, on the whole, these changes have been employer-friendly.

  • Since 2017, the NLRB’s campaign against social media policies, claiming the policies prohibit collective action among employees in violation of Section 7 of the National Labor Relations Act (NLRA), have abated.
  • In 2019, the NLRB overruled longstanding precedent allowing unions to ward off decertification decisions by the use of Unfair Labor Practice charges (known as “Blocking Charges”).
  • In 2019, the NLRB overruled existing precedent creating a presumption that a worker protesting working conditions in a group setting was engaging in collective action.
  • In 2019, the NLRB implemented a recent US Supreme Court decision, holding that it did not violate the NLRA to require workers to agree to class action and collective action waivers in arbitration agreements.
  • In 2017, the NLRB overturned its “joint employment” doctrine. The Board issued a new, pro-employer, proposed regulation; almost 30,000 comments were received and the regulation has not been finalized.
  • In 2019, the NLRB substantially expanded the ability of employers to classify workers as independent contractors rather than as “employees,” again overturning Obama-era precedent.
  • In 2019, the Board held that misclassifying “employees” as “independent contractors” is not itself an Unfair Labor Practice.

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 (and every employee) 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 was promptly reversed by statute.

Virginia will analyse 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 Virginia employees.

Virginia common-law cases generally follow federal-law templates to determine such issues as joint employment, and the difference between an independent contractor and an employee. Virginia courts look to the 20-factor “common law” test used by the US Internal Revenue Service (IRS), with some courts also considering the “economic realities” test used by the US Department of Labor under the federal Fair Labor Standards Act (FLSA). Regardless of test, Virginia courts routinely consider the ability of the employer to control the worker to be dispositive. The clear trend among courts in Virginia is to find that almost any worker is an “employee” rather than an independent contractor. Similarly, the clear trend is to find “joint employment” where two or more entities are involved with the hiring, management, or supervision of a worker. The labels used by the “employing” corporation do not alter this analysis.

For purposes of unemployment compensation, the Virginia Employment Commission has adopted the 20-factor test articulated by the IRS in Revenue Ruling 87-41. Virginia workers' compensation programs look to a separate four-factor test: (i) was the worker selected, (ii) can the worker be dismissed, (iii) does the worker earn pay or wages, and (iv) does the business owner have the ability to exert control over the manner or means of how the worker’s work is performed. Both agencies read the term “employee” broadly.

Virginia does not have a general state-level statute distinguishing “employees” from “independent contractors.” Various state statutes penalize employers for misclassifying employees as independent contractors.

Only three types of employment termination have been held “wrongful” under Virginia common law: (i) 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 share of stock as the employer directed); (ii) where an employer fires an employee for the employee’s refusal to commit a crime (for example, terminating an employee for refusing to engage in fornication with a supervisor, which would be a criminal act); and (iii) 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.

Virginia courts only rarely recognize common-law wrongful termination claims. The “public policy exception” to employment at-will is construed very narrowly.

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.

Although a series of Virginia Supreme Court cases in the 1990s allowed common-law wrongful termination claims for terminations based on sex, race, disability, and age, those common-law claims are no longer viable. The General Assembly amended the Virginia Human Rights Act (the statement of “public policy” upon which those claims were predicated) to eliminate common-law claims based on the policies underlying that Act.

Written documentation at all stages of the employment relationship is strongly recommended, although not required by law in Virginia. The vast majority of Virginia workers are at-will employees who perform their jobs without any written contract of employment. Written employment agreements generally are found only for senior managers, employees who work regularly with highly confidential information, professionals, and employees on more complicated commission arrangements. 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.

Almost all Virginia employers choose to disseminate policies or an “employee handbook.” All of these handbooks contain disclaimers: they are not contractual in nature, do not modify the at-will nature of the employment relationship, and may be modified without prior notice. Virginia courts routinely honour these disclaimers and reject claims by employees that the employer must be held to the terms of the handbook or other policy in dealing with an employee termination. Similarly, while progressive discipline policies are commonplace, the employer must reserve (in writing) the ability to depart from progressive discipline when the occasion warrants. Again, such disclaimers are routinely enforced in Virginia.

Since a policy manual is not a contract, important restrictions on employees must be memorialized in formal contracts if needed. Examples of restrictions that should be placed in standalone contracts are non-competition agreements, non-solicitation agreements, and confidentiality agreements.

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 (ADA) (and, to the extent it is relevant, under the state-level Virginians with Disabilities Act, which provides an employee few remedies).

Virginia wage and hour law generally provides no greater protection to any employee than the federal FLSA. The Virginia wage and hour laws expressly exempt any individual who is subject to the federal FLSA; since almost all employees in Virginia are subject to the federal law, very few Virginia employees are subject to the Virginia analogue. Virginia also expressly exempts from its wage and hour law any employer with fewer than four employees (excluding family members of the employer).

Virginia statute expressly adopts the federal minimum wage as the “Virginia” minimum wage. Virginia law does require work breaks for employees under 16 years of age.

The Virginia Wage Payment Act is more favourable to employers than other state wage payment acts. The Act does not create a private right of action for its enforcement; however, the employee may request administrative enforcement by the state government. The Act does not allow the award of double or treble damages to the employee (as do several neighbouring states, such as Maryland). The Act does not permit an award of attorney’s fees to successful claimants, as do similar laws in most states. The Act provides that the final wages of a covered employee may be paid in the usual manner at the next regularly scheduled payday (in contrast to, for example, the District of Columbia, where an employee who is fired must be paid all wages owed within one day of termination). The Act prohibits any deduction from a covered employee’s wages for any reason (other than required tax withholding) without the signed written consent of the employee; “policies” or handbook statements purporting to authorize withholding funds from a covered employee’s salary are ineffective. The Act is enforced by a division of the Department of Labor and Industry through an administrative process, and civil penalties of up to USD1,000 per violation are allowed, but the agency does not have the resources to pursue more than a handful of cases each year.

In recent years, several emerging common-law issues have confronted Virginia employers.

  • A number of jury awards for common-law defamation have been made against employers, based on performance counselling 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. Unlike most American jurisdictions, Virginia does not distinguish between oral and written defamation; there are no claims under Virginia law for libel or slander, but only for “defamation,” which encompasses both.
  • Virginia recognizes common-law claims against employers based on the theory of negligent hiring of an employee, and negligent retention of an employee. 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 (particularly cases involving touching or unusually vehement verbal abuse), but are almost never successful in Virginia.

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

Virginia’s workforce includes a large foreign-born component. Over 12.5% (one in eight) of Virginia residents are foreign-born, as are one out of six Virginia workers. The most prevalent type of employment for foreign-born Virginians is as “professional, scientific, and technical employees.” One in five of the self-employed business owners in Virginia is foreign-born, and the percentage of foreign-born Virginia workers with a college degree or better is higher than the percentage of US-born Virginia workers with a college degree or better (40% v 36%).

Virginia employers generally 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 95% of Virginia employees do not belong to a union.

Constraints on interviewing and employee selection in Virginia generally track those appropriate under federal law.

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. The federal ADA 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.

The Virginia Human Rights Act 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.

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

In contrast to a number of other states that have recently prohibited initial inquiries regarding criminal history from employment applicants, Virginia has not enacted any state-level legislation on “ban-the-box” for private employers. 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, and the Commonwealth has not granted authority in this area. Nevertheless, private employers are well advised to comply with all such local ordinances.

Virginia has not enacted any restriction on inquiries regarding salary history for private employers. Virginia banned inquiries about salary history for state employees in 2019, but similar efforts to impose restrictions on private employers have failed, to date.

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

Despite the recitation in almost every reported judicial opinion that non-competition covenants are “disfavoured” and “strictly enforced” in Virginia, they are nonetheless routinely enforced. Virginia law on the enforcement of covenants is judge-made; in contrast to some other states (eg, Florida), no state-level statute addresses the enforceability of such a covenant.

Virginia law does have several idiosyncrasies.

  • 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. One of the primary exercises in litigation is to determine the most extreme reasonable reading of the agreement, and then to determine whether that reading would be enforceable. This has been termed, aptly, the “Janitor Defence”: if a covenant, read reasonably, would prohibit a former employee from working for a competitor as a janitor, the covenant is unenforceable.
  • 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 must be sharply drawn to apply to the actual and specific line of business in which the former employer is engaged.
  • Covenants entered into between businesses are not disfavoured in Virginia, and there is some decisional authority to suggest that a similar principle should be used to evaluate covenants entered into by individuals sophisticated and experienced in business.
  • Covenants not to compete, and similar agreements, may be imposed by a Virginia employer during the course of employment. In contrast to a number of states that require agreement to a covenant at the inception of the employment relationship, or that will enforce covenants only where additional consideration is paid (for example, neighbouring North Carolina), Virginia does not require such provisions.
  • 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 governing companies with lengths of up to five years.

Virginia state law does not provide for any general right of privacy in favour 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.

The perhaps infelicitously named Virginia Computer Crimes Act of 1984 provides Virginia employers with a strong tool for data privacy. The Act makes it unlawful for a person (including an employee) to use a computer or computer network without permission (i) to commit computer fraud, defined as larceny, embezzlement, or obtaining property by false pretences; (ii) to commit computer trespass, which includes using a computer or network to alter or erase any data; or (iii) 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. While a violation of the Act constitutes a crime, the Act also creates a private cause of action enabling the owner of the data or the network to sue privately in court for damages and an injunction. The Act also expressly allows the court to enter orders to ensure the secrecy of any data involved in the court proceeding.

Virginia courts generally have been protective of the principle that the owner of a computer network owns the data placed on the network by its employees, even if the employee considers that data private. The Virginia Supreme Court has noted that e-mails 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 sharply and 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 is one of only two states (the other being Maryland) to have adopted the Uniform Computer Information Transactions Act (UCITA).

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. The Trade Secrets Act allows a private cause of action to enjoin actual or threatened misappropriation of a trade secret, recover actual damages, and to recover attorney’s fees expended (in the case of willful and malicious trade secret misappropriation). 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.       

Discrimination, harassment, and retaliation issues in Virginia are governed almost exclusively by federal law. The Virginia Human Rights Act adds two protected categories (marital status and childbirth) but the remedies and coverage afforded by state law are so narrow as to be meaningless. See 6.7 Possible Relief.

Virginia does not mandate any harassment or discrimination training, although it remains best practice to conduct periodic training.

A number of Virginia localities have purported to add protected categories to those defined in the state Act. For example, Arlington County protects “sexual orientation,” which is not a protected category under state law. The legality of local-level action in Virginia beyond the authority granted by the General Assembly is subject to question. Of course, employers should not discriminate on any basis protected by law.

Virginia state law does not make sexual (or other forms of) harassment unlawful. Virginia state law also does not make retaliation against individuals complaining of discrimination or participating in a proceeding unlawful.

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

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. VOSH has adopted the majority of federal health and safety standards under OSHA, 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.

Other than requiring payment of the federal minimum wage, Virginia imposes few 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) – which, despite its name, deals with the continuation of employer-provided health benefits for a period of time after the end of employment, albeit paid for by the employee – 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.

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 (95% of Virginia private-sector workers are not subject to such agreements) or a written employment contract, no cause is ever needed for a termination. Written employment contracts are most often found at the higher levels of management; virtually all non-managerial Virginia employees have no written employment agreement and are terminable at will. Virginia does not place any restriction on the contractual definition of “cause” for termination in any contract between an employee and an employer.

Employees discharged for cause may be disqualified from receiving benefits from the Virginia Employment Commission under the Virginia Unemployment Compensation Act. An otherwise-eligible former employee is disqualified for benefits if the individual was discharged for misconduct connected with work. “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, 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 and imposes no requirements in addition to those set by federal law. WARN notification is triggered when an employer with 100 or more full-time workers deems it necessary to do any of the following: (i) close a facility or discontinue an operating unit with 50 or more full-time workers, (ii) lay off 50-499 full-time workers (and these workers comprise at least 33% of the total workforce at a single site of employment), or (iii) lay off 500 or more full-time workers at a single site of employment. Notification must be sent to the local government chief executive in the impacted locality, to workers (or their union representative), and to the state-level State Dislocated Worker Unit of the Virginia Employment Commission.

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. 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.

In contrast to contiguous jurisdictions (eg, Maryland and the District of Columbia), 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 (despite the adoption of such laws in a number of states in recent years).

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. For employees age 40 or older, the federal Older Workers Benefit Protection Act (OWBPA) requires certain conditions in order for such a release to be effective. A release under the OWBPA must be written in plain language, must specifically mention the federal Age Discrimination in Employment Act of 1967 as one of the possible claims the employee is releasing, should advise the employee to consult an attorney, must give the employee up to 21 days to consider the release (which may be waived by an earlier signature), and must allow the employee to revoke the agreement any time within seven days of signing the release (which may not be waived or shortened). In the case of a “mass” lay-off or termination – which is defined by the US Equal Employment Opportunity Commission to be the simultaneous termination of two or more employees – the employees also must be provided data on the employees considered for termination, and provided up to 45 days to consider the release.

Under Virginia law, the sine qua non for the enforcement of any release signed by a former employee is that the employee receive 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.

Virginia law recognizes only a very narrow class of discharges that may be challenged as “termination in violation of public policy” or “wrongful termination” (see 2.1 Defining and Understanding the Relationship and 2.2 Alternative Approaches to Defining, Structuring and Implementing the Basic Nature of the Entity). Virginia courts have declined to expand the concept of wrongful termination in recent years, and the vast majority of such claims made in the last ten years have been unsuccessful.

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

Deprivation or loss of benefits of employment, including adverse transfer and demotion, are actionable under federal law if motivated by discriminatory animus. However, under Virginia law, unless the change constitutes a breach of contract, no claim will lie. 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.

The Virginia Human Rights Act provides a narrow remedy for terminations based on certain discriminatory criteria, and is applicable only to small businesses. See 6.7 Possible Relief.

Sexual harassment – indeed, all forms of discriminatory harassment – are not unlawful under Virginia state law. The Human Rights Act applies only to the termination of employment, not to the terms and conditions of employment. However, many actions that might be categorised as part of a harassment claim may be unlawful under other provisions of Virginia common or statutory law. For example, what was originally the Virginia anti-duelling statute allows claims against someone who uses “fighting words” against another. Unwanted touching or placing someone in unreasonable apprehension may be actionable as civil assault or battery. In very extreme cases, a claim for intentional infliction of emotional distress may be made, although those claims are seldom successful in the employment context. Where these tort claims are viable, Virginia law allows recovery of lost income (if any) as well as for emotional distress, inconvenience, and other general damages.

Punitive damages are available under Virginia law in tort, but not breach of contract, cases. Punitive damages are limited to USD350,000 in all Virginia-law cases.

Claims based on personnel manuals or policy statements are almost never successful in Virginia, provided a proper disclaimer has been made indicating that the policy does not constitute a contract.

Wage and hour claims in Virginia are governed by federal law. The Virginia wage and hour statutes apply only to that minuscule portion of the workforce that is not covered by the FLSA. A separate exclusion provides that employers with fewer than four employees are exempt from the Virginia law.

Virginia has no general law protecting whistle-blowers in the private sector. The Virginia Fraud Against Taxpayers Act creates a limited whistle-blower remedy for public employees.

The Virginia Human Rights Act does not contain any prohibition on retaliation against an employee for participating or supporting a discrimination claim under state law.

Both federal and state courts in Virginia pride themselves on the rapid resolution of disputes. For more than a decade, the federal courts in the Eastern District of Virginia have been the fastest federal courts in the country, with a median time between the initial filing of a Complaint and a plenary 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. 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. The magistrate judge will then be recused from further participation in 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 also has a well-developed cadre of professional mediators and arbitrators, many of whom are particularly knowledgeable about employment issues arising under Virginia and federal court. 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. There is, for example, no right of appeal in civil cases; the Virginia Court of Appeals has limited jurisdiction (criminal, workers compensation, domestic relations) and 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 artefacts of an earlier time: one may interpose a demurrer or crave oyer. (Don’t ask.) 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.

Virginia law does not provide for or permit class actions for any state-law claim.

While class actions under federal employment laws governing discrimination are cognizable in Virginia courts, the most common multiple-plaintiff action seen in Virginia is the federal court collective action claim under the federal Fair Labor Standards Act, alleging unpaid overtime due to employee misclassification (non-exempt employees misclassified as exempt employees) or unrecorded working time. Such claims are not at all uncommon in Virginia and have been increasing in frequency in recent years. In contrast to true class action claims (in which the additional employees are made parties unless they affirmatively opt out of the case), in a collective action under the FLSA additional employees are made parties only if they affirmatively opt into the case.

Virginia courts routinely enforce class action waivers in arbitration agreements between employee and employer; whether similar class action waivers will be viewed favourably in the absence of an agreement to arbitrate is an open issue. Virginia courts will enforce waivers of jury trials when entered into knowingly.

Virginia courts are familiar with, and routinely award, the panoply of damages available under the federal antidiscrimination laws. Back pay and compensatory damages for emotional distress routinely are awarded by Virginia juries. In federal court in Virginia, there has been some tendency to rein in large emotional distress verdicts unless amply supported by the evidence, including expert evidence.

In Virginia, front pay awards under the federal antidiscrimination laws, where available, are generally awarded by the court rather than submitted to a jury for determination. Front pay awards are not routine and are given only in exceptional circumstances. Similarly, reinstatement is a seldom-used remedy in Virginia under the federal antidiscrimination laws.

Punitive damages are allowed in claims under the federal antidiscrimination 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 antidiscrimination 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 antidiscrimination 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. However, even though most of the federal statutes also authorize the reciprocal – an unsuccessful employee may be directed to pay the employer’s attorney’s fees – in practice, and as a matter of US Supreme Court direction, awards of fees in favour of successful employer/defendants are extraordinarily uncommon. Fees are awarded to successful employer/defendants only where the employee’s claim was frivolous or without foundation, a difficult standard to meet.

In contrast to the variety of damages that may be awarded under federal employment law, the availability of damages under Virginia law in employment and employment-related cases is much more limited.

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. While fee requests under Virginia contracts must be documented with the same rigor as fee requests under federal antidiscrimination statutes:

  • Federal courts often will 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; and
  • Virginia courts in a contract case generally will award fully compensatory fees regardless of the level of success obtained. In one 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.

The Virginia Human Rights Act (VHRA) governs state-law discrimination claims. The law provides that conduct that violates any Virginia or federal statute or regulation governing discrimination on the basis of race, color, religion, national origin, sex, pregnancy, childbirth or related medical conditions, age, marital status, or disability shall be an "unlawful discriminatory practice" for the purposes of this chapter.

The VHRA does not purport to ban employment discrimination on the basis of sexual orientation, gender identity, or any one of a plethora of other “protected characteristics” that may be found in other state and local laws. (For example, Pennsylvania bans discrimination against employees on the basis of their status as guide dog handlers, the District of Columbia bans discrimination against employees on the basis of their personal appearance, and North Carolina bans discrimination against employees on the basis of their out-of-work use of legal substances; ie, tobacco.)

The remedies available to an employee under the VHRA are so narrow and restricted that it appears that the number of successful claims under the Act since its amendment to provide a private cause of action in 1995 can be counted on the thumbs of one hand. In particular:

  • the VHRA governs employers with between six and fourteen employees (nineteen employees for purposes of age discrimination claims); larger employers are covered only by federal law;
  • the VHRA prohibits only a discriminatory termination of employment; it does not make harassment of any kind unlawful;
  • the Act prohibits the award of punitive damages;
  • the Act prohibits the award of general compensatory or emotional distress damages;
  • the statute of limitations for claims made under the Act is, in most cases, 300 days after termination;
  • the Act limits monetary awards under the Act to twelve months’ back pay;
  • the Act forbids the court to order reinstatement of the employee; and
  • the Act permits the court to award a prevailing former employee her or his attorney’s fees, but those fees are deducted from the back pay amount, and cannot exceed one quarter of the back pay award.

Thus, for example, if the employee of a small business is making USD70,000 per year (slightly above the 2018 Virginia median household income), and that employee is expressly terminated because of sex or some other protected characteristic, the most the employee may recover under the Virginia Human Rights Act is USD70,000, of which USD17,500 goes to the former employee’s lawyer. Employment discrimination cases are hard to win and costly to litigate, and it would be a very unusual employee-side attorney who would take such a case. Essentially, very few have.

Virginia employers also should 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 often is 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.

Virginia courts routinely enforce choice-of-law and choice-of-venue clauses in employment contracts, confidentiality agreements, covenants not to compete or not to solicit, and similar agreements. Contracts imposed by a Virginia employer that require litigation to be brought, if at all, in Virginia (or in a particular court in Virginia) are commonplace, even if the employee is located outside of the Commonwealth.

Correlatively, Virginia courts routinely enforce choice-of-law clauses in contracts entered into by Virginia employees or employers where non-Virginia law is specified.

Kaufman & Canoles, P.C.

150 West Main Street
Post Office Box 3037
Norfolk
Virginia 23514

(757) 624 3000

(888) 360 9092

www.kaufcan.com
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Kaufman & Canoles, P.C. is a business-oriented law firm celebrating its centennial. Practicing from its eight offices across the Commonwealth of Virginia, the firm has one of the largest labor and employment law teams in the state. It counts among its ten members three former chairs of the Virginia Bar Association Section on Labor Relations and Employment Law. The team works closely with the firm's Employee Benefits group and its business and transactional attorneys, first and foremost to counsel clients to prevent problems. Experienced first-chair litigators and jury trial attorneys – a vanishing breed in modern employment law – stand ready to assist at all phases of the process, from administrative agencies through the appellate courts. The firm represents employment-law clients of all sizes and in every industry, from massive shipyards to mid-sized financial institutions to local government and quasi-governmental agencies. True to the firm’s founding principles, it represents employers – and only employers.

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