Submitted by Office of U.S. Senator Todd Young
Young
On Wednesday, U.S. Senators Todd Young (R-Ind.) and Chris Murphy (D-Conn.) reintroduced the Workforce Mobility Act, bipartisan legislation to limit the use of non-compete clauses that negatively impact American workers. U.S. Senators Tim Kaine (D-Va.) and Kevin Cramer (R-N.D.) co-sponsored the legislation.
About one in five American workers – 30 million people – are constrained by a non-compete clause, which blocks workers from working 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 growth, career advancement, innovation, and human freedom,” Sen. Young said. “Our bill aims to remove these barriers and create opportunities that help, not hinder, Hoosier workers. The reforms in our legislation will assist workers and entrepreneurs so they can freely apply their talents where their skills are in greatest demand.”
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.
Click here to read a one-page summary of the bill.
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