By Clifford R. Atlas with Jackson Lewis P.C., Erik J. Winton with Jackson Lewis P.C. and Justin E. Theriault with Jackson Lewis P.C.
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.
Under the Act’s definitions, a “noncompete agreement” means an agreement entered into after the date of the enactment of the Act between a person and an individual performing work for the person that restricts such individual, after the working relationship between the person and the individual terminates, from performing:
Any work for another person for a specified period of time;
Any work in a specified geographical area; or
Any work for another person that is similar to such individual’s work for the person that is a party to such agreement.
Limited exceptions to the ban permit non-competes under specified conditions, including in connection with the sale of certain interests in a business or the dissolution of, or disassociation from, partnerships.
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.
The Act would require all employers with employees in or affecting commerce to post notice of the provisions of the Act in a conspicuous place where notices to employees and applicants for employment are customarily posted physically or electronically.
If you would like to learn more about how to safely outsource compliance and HR functions, contact us.
JACKSON LEWIS P.C. (“FIRM”) PROVIDES THE INFORMATION IN THIS POST FOR GENERAL INFORMATIONAL PURPOSES ONLY. THIS POST SHOULD NOT BE RELIED UPON OR REGARDED AS, LEGAL ADVICE. NO ONE ACCESSING OR REVIEWING THIS POST, WHETHER OR NOT A CURRENT CLIENT OF THE FIRM, SHOULD ACT OR REFRAIN FROM ACTING ON THE BASIS OF SUCH CONTENT OR INFORMATION, WITHOUT FIRST CONSULTING WITH AND ENGAGING A QUALIFIED, LICENSED ATTORNEY, AUTHORIZED TO PRACTICE LAW IN SUCH PERSON’S PARTICULAR STATE, CONCERNING THE PARTICULAR FACTS AND CIRCUMSTANCES OF THE MATTER AT ISSUE. THE POST MAY NOT REFLECT CURRENT LEGAL DEVELOPMENTS, OR LAWS OR RULES THAT MAY APPLY IN PARTICULAR JURISDICTIONS. THE FIRM AND ITS LAWYERS EXPRESSLY DISCLAIM ALL LIABILITY IN CONNECTION WITH ACTIONS TAKEN OR NOT TAKEN BASED ON ANY OR ALL OF THE CONTENTS OR INFORMATION ACCESSIBLE THROUGH THIS SITE. ANY INFORMATION ABOUT PRIOR RESULTS ATTAINED BY THE FIRM OR ITS LAWYERS IS NOT A GUARANTEE OR WARRANTY THAT A SIMILAR OUTCOME WILL BE ACHIEVED.
THE FIRM IS NOT RESPONSIBLE FOR THE CONTENT, OPERATION, LINKS OR TRANSMISSIONS, OR ANY INFORMATION PROVIDED ON ANY OTHER PART OF ASURE SOFTWARE, INC.’S WEBSITE OR ANY THIRD-PARTY WEBSITE WHICH MAY BE ACCESSED BY A LINK FROM THIS WEBSITE.
NOTHING PROVIDED BY THE FIRM IS INTENDED TO FORM, AND WILL NOT CREATE, AN ATTORNEY-CLIENT RELATIONSHIP.
THIS POST MAY BE CONSIDERED ATTORNEY ADVERTISING UNDER THE RULES OF SOME STATES. THE HIRING OF AN ATTORNEY IS AN IMPORTANT DECISION THAT SHOULD NOT BE BASED SOLELY UPON ADVERTISEMENTS.
STATEMENT IN COMPLIANCE WITH TEXAS RULES OF PROFESSIONAL CONDUCT: UNLESS OTHERWISE INDICATED IN INDIVIDUAL ATTORNEY BIOGRAPHIES, LAWYERS RESIDENT IN THE FIRM’S VARIOUS OFFICES ARE NOT CERTIFIED BY THE TEXAS BOARD OF LEGAL SPECIALIZATION.