WASHINGTON—U.S. Senator Chris Murphy (D-Conn.) and U.S. Senator Todd Young (R-Ind.) on Wednesday reintroduced the Workforce Mobility Act, bipartisan legislation to limit the use of non-compete agreements that negatively impact American workers. U.S. Representative Scott Peters (D-Calif.-52) and U.S. Representative Mike Gallagher (R-Wis.-08) introduced the legislation in the U.S House of Representatives. U.S. Senator Tim Kaine (D-Va.) and U.S. Senator Kevin Cramer (R-N.D.) co-sponsored the legislation.

Almost one in five American workers – 30 million people – are constrained by a non-compete agreement, which block workers from working for a competing employer or starting a competing business. Research indicates that workers trapped by non-competes have lower wages, and their restricted mobility makes it more difficult for businesses to recruit talent. In states where non-competes are enforced, young firms are more likely to die in their first three years compared to states where they are not enforced.

“Across industries and income brackets, non-competes are terrible for workers and a major drag on economic growth. It’s ridiculous we let companies hide behind these agreements as a means to depress wages and stave off competition. I’m glad the FTC has proposed a rule to ban the use of non-competes, but Congress should go even further and pass our legislation to protect workers and support entrepreneurs,” said Murphy.

“Non-compete agreements stifle wage growth, career advancement, innovation, business creation, and human freedom. Our bill aims to remove these barriers and create opportunities that help, not hinder, Hoosier workers,” said Young. “The reforms in our legislation will empower workers and entrepreneurs so they can freely apply their talents where their skills are in greatest demand.”

“Companies shouldn’t be able to restrict Americans’ freedom to pursue different jobs,” said Kaine. “Non-compete agreements suppress wages, make it harder for businesses to hire talent, and hinder our economic growth. I’m proud to join my colleagues in introducing this bill to support workers.”

“Non-compete agreements stifle innovation and job mobility. North Dakota is a national leader in blocking these inhibitive practices,” said Cramer. “Our bipartisan bill makes non-competes virtually illegal and puts more back into the hands of the American worker.”

“Since 2020, I have worked to limit the use of noncompete agreements that slow economic innovation and productivity,” said Peters. “These agreements restrict workers, disrupt labor markets, and impede economic prosperity for Americans. By banning these agreements nationally like in California, we give the power back to the American worker and ultimately strengthen our economy’s competitiveness.”

“Non-compete agreements restrict mobility in the workforce and hinder economic growth. While the FTC has proposed reforming these agreements, Congress must go further and permanently modify these burdensome regulations. It’s time for Congress to pass the bipartisan, common-sense Workforce Mobility Act to reform non-compete agreements and empower American workers,” said Gallagher.

The Workforce Mobility Act would:

  • Narrow the use of non-compete agreements to include only necessary instances of a dissolution of a partnership or the sale of a business;
  • Charge the Federal Trade Commission and the Department of Labor with enforcement, as well as making explicit a private right of action in federal court;
  • Require employers to make their employees aware of the limitation on non-competes, as studies have found that non-competes are often used even when they are illegal or unenforceable. The Department of Labor would also be given the authority to make the public aware of the limitation; and
  • Require the Federal Trade Commission and the Department of Labor to submit a report to Congress on any enforcement actions taken.

Last month, Murphy, Young, Kaine, and Cramer applauded the FTC’s proposed rule banning employers from imposing non-compete agreements on their employees.

A one pager of the bill is available here.

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