Non-Compete Ban Re-Introduced in Congress

A bipartisan group of Senators introduced the Workforce Mobility Act this week, a proposal which would ban non-compete agreements in nearly all circumstances.

Why it matters: The bill underscores growing bipartisan momentum at the federal level for restricting — or even banning — non-compete agreements, making the prospect of a new federal law increasingly realistic.

The bill: The Workforce Mobility Act, which has been proposed in previous Congresses was introduced by Sens. Murphy (D-CT) and Young (R-IN) and co-sponsored by Sens. Kaine (D-VA) and Cramer (R-ND). The bill would do the following: 

• Prohibit all non-compete agreements except in cases involving the sale of a business or the dissolution of a partnership.

• Require employers to give employees notice that non-competes are no longer lawful.

• Charge the Federal Trade Commission and the Department of Labor with enforcement.

• Establish a private right of action in federal court for non-compete claims.

A federal law on the way? While the usual caveats about a hyper-partisan and gridlocked Congress still apply, the prospect of a federal non-compete law is becoming increasingly realistic.

• The Workforce Mobility Act is not the only proposal targeting non-compete agreements with support from both sides – Former Sen. Rubio (R-FL) and Sen. Hassan (D-NH) have previously introduced similar legislation.

• Meanwhile, the Association is in talks with key Senators on the introduction of a bipartisan non-compete bill to restructure, but not eliminate, their use.  

HRPA advocacy: The Association has and will continue to advocate for a federal law that permits non-compete agreements for executive-level employees and those with access to sensitive information, while banning their use for lower-wage workers.

• This advocacy aligns with how the vast majority of the Association’s member companies use non-compete agreements.

• Our goal is two-fold: Avoid a full ban and provide relief from the increasing number of state laws restricting non-competes.