March 23, 2023

Volume XIII, Number 82


March 22, 2023

Subscribe to Latest Legal News and Analysis

March 21, 2023

Subscribe to Latest Legal News and Analysis

March 20, 2023

Subscribe to Latest Legal News and Analysis

Bipartisan Bill to Ban Most Non-Compete Agreements Reintroduced in U.S. Senate

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.

Jackson Lewis P.C. © 2023National Law Review, Volume XIII, Number 34

About this Author

Clifford R. Atlas Protection Against Unfair Competition Attorney Jackson Lewis New York, NY

Clifford Atlas is a Principal in the New York City, New York, office of Jackson Lewis P.C. He is the Co-Leader of the Non-Competes and Protection Against Unfair Competition Practice Group.

Mr. Atlas works extensively with clients in developing and drafting employment contracts and restrictive covenant agreements, and developing programs to best protect clients’ confidential business information. He has significant experience in prosecuting as well as defending actions involving breach of non-competition and non-solicitation agreements, employee raiding,...

Erik J. Winton, Jackson Lewis, Principal, Retaliation Lawyer, restrictive covenant drafting attorney

Erik J. Winton is a Principal in the Boston, Massachusetts, office of Jackson Lewis P.C. He is the Co-Leader of the firm's Non-Competes and Protection Against Unfair Competition practice group. His practice focuses on restrictive covenant drafting, counseling, litigation avoidance and litigation. He regularly provides valuable counsel to clients in New England and across the country regarding these issues.

Mr. Winton has extensive experience as a litigator, including successful first chair jury trial experience. He represents employers in...

Justin E. Theriault Employment Lawyer Jackson Lewis

Justin E. Theriault is an associate in the Hartford, Connecticut, office of Jackson Lewis P.C. Justin practices employment law on behalf of employers in federal and state court, as well as in administrative proceedings.

Justin is the author of The Connecticut Employment Law Manual, an annual guide published by Jackson Lewis that is intended to provide guidance to Connecticut employers on a wide variety of Connecticut employment law topics.

Justin provides advice and counsel to...