February 1, 2023

Young, Murphy Reintroduce Bill to Protect American Workers, Limit Non-Compete Agreements

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

 

Almost one in five American workers – 30 million people – are constrained by a non-compete agreement, which blocks workers from leaving their jobs 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.

“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 assist workers and entrepreneurs so they can freely apply their talents where their skills are in greatest demand.”

 

“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.

 

“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.”

 

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;
  • 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.

 

A one pager of the bill is available here.

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