WASHINGTON, D.C. – Today, Rep. Scott Peters (CA-50) issued a statement following the Federal Trade Commission’s announcement of a new rule proposal to prohibit enforcement of noncompete agreements nationwide.

 

“Since 2020, I have worked to limit the use of noncompete agreements by introducing the Workforce Mobility Act,” said Rep. Peters. “I applaud this measure to ban these agreements across the country, just like we do in California. These clauses lower workers’ wages and limit entrepreneurship opportunities, among other harmful consequences. Because this rule is subject to changes under a new administration, Congress must pass our bipartisan Workforce Mobility Act to enshrine workers’ protections into law and make our economy more competitive.”

 

Rep. Peters reintroduced the bipartisan and bicameral Workforce Mobility Act of 2021 with Reps. Mike Gallagher (WI-08), Anna G. Eshoo (CA-16) and Peter Meijer (MI-03). The bill aims to give power back to the American worker so they can achieve their full potential while strengthening our economy and increasing market competition.

 

“Yesterday, the FTC announced a proposal to eliminate non-compete agreements that restrict mobility in the workforce and hinder economic growth,” said Rep. Gallagher. “While this is a positive step that will promote competition and help businesses grow, Congress must go further and codify this proposal into law by passing the Workforce Mobility Act.”

 

The Workforce Mobility Act (H.R.1367) would:

• Severely restrict the use of non-compete agreements and only allow noncompete agreements in necessary instances of a dissolution of a partnership or the sale of a business;
• Enforce a ban via 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; and
• Require the Federal Trade Commission and the Department of Labor to submit a report to Congress on any enforcement actions taken.

About one in five American workers—approximately 30 million people—are bound by a non-compete clause. These clauses restrict workers from pursuing better employment opportunities. A non-compete clause is a contractual term between an employer and a worker that blocks the worker from working for a competing employer, or starting a competing business, typically within a certain geographic area and period of time after the worker’s employment ends.