U.S. Senators Todd Young (R-Indiana) and Chris Murphy (D-Connecticut) introduced a bill on October 16, 2019, called the Workforce Mobility Act, which would significantly limit the use of non-compete agreements nationwide. A few states, such as California, North Dakota, and Oklahoma, already largely prohibit the use of non-compete agreements, and others, such as New Hampshire and Maine, prohibit the use of such restrictive covenants between employers and low-wage employees.
The Workforce Mobility Act isn’t the first legislation of its kind to be introduced at the federal level. Just last session, Senator Murphy co-sponsored a similar bill by the same name with Senator Elizabeth Warren (D-Massachusetts), and earlier this year, Senator Marco Rubio (R-Florida) introduced the Freedom to Compete Act, which would limit the use of non-compete agreements between employers and non-exempt employees. The newly introduced bill, however, is more far-reaching than the Freedom to Compete Act and has bipartisan support.
According to a press release from Senator Young’s office, 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, as well as a private right of action.
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.
Require the Federal Trade Commission and the Department of Labor to submit a report to Congress on any enforcement actions taken.
The text of the new bill can be viewed here.
While multistate employers may benefit logistically from the enactment of a uniform, nationwide law, they would lose a protective resource from their arsenal. Stay tuned, and let myHRcounsel help you stay compliant.
This blog article is intended for general informational purposes only and should not be construed as legal advice or opinion. Contact myHRcounsel with questions concerning specific facts and circumstances.