Bill Aims To Ban Employer Non-Competes

A bipartisan group of U.S. Senators has reintroduced a bill, dubbed the “Workforce Mobility Act of 2023,” that would largely ban the use of employer non-compete agreements nationwide as a matter of federal law. This follows on the heels of the proposed rule by the Federal Trade Commission (FTC) that would make most employment non-compete agreements, as well as “de facto” non-competes, an unfair or deceptive trade practice under federal law.

The Act, previously introduced in 2019 and 2021, was reintroduced by Senators Christopher Murphy (D-Conn.) and Todd Young (R-Ind.) and is co-sponsored by Senators Tim Kaine (D-Va.) and Kevin Cramer (R-N.D.).

If passed, the Act would codify the use of employment non-competes as an unfair trade practice under federal law. The Act provides that, with certain limited exceptions, “no person shall enter into, enforce, or attempt to enforce a noncompete agreement with any individual who is employed by, or performs work under contract with, such person with respect to activities of such person in or affecting commerce,” and that noncompete agreements will have no force or effect.

The Act would authorize the FTC, federal Department of Labor, state attorneys general, and individual employees to bring actions against employers who violate the Act to seek penalties, damages, injunctions, and other relief. Claims under the Act would also be exempted from arbitration and joint-action waivers, including waivers of joint, class, and collective actions.