Young, Murphy, Cramer, Kaine Introduce Bill Giving Workers Freedom to Leave
WASHINGTON – U.S. Senators Todd Young (R-Ind.), Chris Murphy (D-Conn.), Kevin Cramer (R-N.D.), and Tim Kaine (D-Va.) on Thursday reintroduced the Workforce Mobility Act, bipartisan legislation to limit the use of non-compete agreements that negatively impact American workers. Rep. Scott Peters (D-Calif.-52) and Rep. Peter Meijer (R-Mich.-3) introduced the legislation in the U.S. House of Representatives.
The global pandemic has upended the workforce and caused dramatic shifts in the job market. Non-competes cover roughly 20% of American workers and are extremely detrimental, especially during this time of workforce uncertainty. Research shows that workers trapped by non-competes are less mobile, which results in firms having difficulty hiring workers with the right set of skills. 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.
“Non-compete agreements stifle wage growth, career advancement, innovation, and business creation. Our bill aims to remove these barriers, and create opportunities that help, not hinder, Hoosier workers,” said Senator Young. “During this global pandemic, Americans need utmost flexibility to find and secure employment – this is clearly not the time for non-compete agreements that deny workers their ‘freedom to leave.’ The reforms in the Workforce Mobility Act will empower our workers and entrepreneurs so they can freely apply their talents where their skills are in greatest demand, especially given the dramatic shifts in the job market over the past year.”
“Non-compete agreements impact all Americans regardless of their industry or income bracket, and I’m tired of seeing companies hide behind these agreements as a way to depress wages and prevent competition. People want to be able to change jobs and earn more money. The Workforce Mobility Act provides that freedom while also supporting new business opportunities and overall economic growth,” said Senator Murphy.
John Lettieri, President and CEO of the Economic Innovation Group: “Non-compete agreements hinder worker mobility, reduce wage growth, and stifle entrepreneurship and innovation. At a time when millions of workers have been displaced by a pandemic and economic crisis, the bipartisan Workforce Mobility Act would be a major step in fostering a more open and dynamic economy in which all Americans can achieve their full potential. EIG applauds Senators Murphy, Young, Cramer, and Kaine and Representatives Peters, Gallagher, Eshoo, and Meijer for their leadership on this important legislation.”
Eli Lehrer, President, R Street Institute: “Non-compete agreements are an affront to the free market. They reduce wages, discourage innovation and are deeply unfair to workers. The entire nation would be far better off if we were to eliminate them immediately and completely.”
In 2020, Young and Murphy led a bipartisan letter to the Federal Trade Commission (FTC) urging them to act to limit the use of non-competes. In 2019, Young and Murphy also led a bipartisan Senate letter urging the Government Accountability Office (GAO) to investigate the use and abuse of non-competes.
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;
- Place the enforcement responsibility on the Federal Trade Commission and the Department of Labor;
- 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.
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