119-s2031

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 2031 Introduced in Senate

    (IS) ]

<DOC>

119th CONGRESS
 1st Session
 S. 2031

 To prohibit certain noncompete agreements, and for other purposes.

_______________________________________________________________________

 IN THE SENATE OF THE UNITED STATES

 June 11, 2025

 Mr. Murphy (for himself, Mr. Young, Mr. Cramer, and Mr. Kaine) 
introduced the following bill; which was read twice and referred to the 
 Committee on Health, Education, Labor, and Pensions

_______________________________________________________________________

 A BILL

 To prohibit certain noncompete agreements, and for other purposes.

 Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

 This Act may be cited as the ``Workforce Mobility Act of 2025''.

SEC. 2. FINDINGS.

 Congress finds the following:

    (1) The proliferation of noncompete agreements throughout 
 sectors, occupational categories, and income brackets is 
 contrary to the commitment of Congress to foster stronger wage 
 growth for workers in the United States. Economists now 
 estimate that 1 in 5 workers is covered by a noncompete 
 agreement.

    (2) Noncompete agreements are blunt instruments that 
 crudely protect employer interests and place a drag on national 
 productivity by forcing covered workers to either idle for long 
 periods of time or leave the industries in which the workers 
 have honed their skills altogether.

    (3) Enforceable noncompete agreements also reduce wages, 
 restrict worker mobility, impinge on the freedom of a worker to 
 maximize labor market potential, and slow the pace of 
 innovation in the United States.

    (4) Employers have access to legal recourses to protect 
 their legitimate interests and property, including trade secret 
 protections, intellectual property protections, and 
 nondisclosure agreements that do not inflict broad collateral 
 harm on the labor market prospects for workers.

    (5) Employers that rely on a list or lists of vendors, 
 customers, or clients that are not easily obtained by an 
 individual through means other than the work relationship have 
 adequate legal protection through the use of trade secret 
 protections and nondisclosure agreements.

    (6) Noncompete agreements broadly restrict employment 
 options for workers in the United States when more narrowly 
 targeted remedies are readily available to employers.

    (7) Fostering an environment where employers can flourish 
 is necessary to promote vitality and prosperity in the economy.

    (8) Employers may retain critical skilled employees while 
 ensuring that disincentives affecting mobility, including 
 noncompete agreements, do not negatively impact the workforce 
 in the United States.

SEC. 3. PROHIBITING NONCOMPETE AGREEMENTS.

    (a) Prohibition.--

    (1) In general.--Except as provided in subsection

    (b) , 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 
 the activities of such person in or affecting commerce.

    (2) Effect of agreements.--Except as provided in subsection

    (b) , a noncompete agreement described in paragraph

    (1) shall 
 have no force or effect.

    (b) Exceptions.--

    (1) Sale of goodwill or ownership interest.--
        (A) In general.--A seller of a business entity may 
 enter into an agreement with the buyer to refrain from 
 carrying on a like business within a specified 
 geographic area described in subparagraph
            (C) , if the 
 buyer, or any person deriving title to the goodwill of 
 the business entity or an ownership interest in the 
 business entity from the buyer, carries on a like 
 business in such specified geographic area.
        (B) Senior executive officials with severance 
 agreements.--
            (i) In general.--Subject to clause
            (ii) , a 
 buyer or seller of a business entity may enter 
 into a noncompete agreement with a senior 
 executive official who has a severance 
 agreement described in clause
            (iii) that 
 restricts the senior executive official from 
 performing, within a specified geographic area 
 described in subparagraph
            (C) , any work that is 
 similar to the work that the senior executive 
 official performed for the buyer or seller, if 
 the buyer, or any person deriving title to the 
 goodwill of the business entity or an ownership 
 interest in the business entity from the buyer, 
 carries on a like business in such specified 
 geographic area.
            (ii) Time-limited agreement.--A noncompete 
 agreement described in clause
            (i) may not 
 restrict the senior executive official as 
 described in such clause for a period that is 
 more than one year.
            (iii) Severance agreement.--A severance 
 agreement described in this clause is an 
 agreement between the buyer or seller of a 
 business entity and a senior executive official 
 that--
            (I) is part of the terms and 
 conditions of the sale; and
            (II) requires monetary compensation 
 for the senior executive official in 
 the event of termination of the 
 employment of the senior executive 
 official at an amount that is not less 
 than the compensation that the senior 
 executive official is or would be 
 reasonably expected to receive from the 
 buyer during the 1-year period 
 following the sale.
            (C) Specified geographic area.--A specified 
 geographic area described in this subparagraph is a 
 geographic area--
            (i) that is specified in an agreement 
 described in subparagraph
        (A) , or a noncompete 
 agreement described in subparagraph
        (B) , 
 regarding a business entity; and
            (ii) in which such business entity, 
 including any division or subsidiary of such 
 business entity, conducted business prior to 
 the agreement or noncompete agreement.

    (2) Partnership dissolution or disassociation.--
        (A) In general.--Any partner of a partnership may 
 enter into an agreement with any other member of the 
 partnership that, upon the dissolution of the 
 partnership or dissociation of the partner from such 
 partnership, the partner will refrain from carrying on 
 a like business within a specified geographic area 
 described in subparagraph
        (B) , if any other member of 
 the partnership, or any person deriving title to the 
 partnership or the goodwill of the partnership from any 
 other member of the partnership, carries on a like 
 business in such specified geographic area.
        (B) Specified geographic area.--A specified 
 geographic area described in this subparagraph is a 
 geographic area--
            (i) that is specified in an agreement 
 described in subparagraph
        (A) ; and
            (ii) in which any business of the 
 partnership has been transacted prior to the 
 agreement.

SEC. 4. TRADE SECRETS.

 Nothing in this Act shall preclude a person from entering into an 
agreement with an individual who is employed by, or performs work under 
contract with, such person with respect to the activities of such 
person in or affecting commerce to not disclose any information 
(including after the individual is no longer employed or performing 
work for the person) regarding the person, or the work performed by the 
individual for the person, that is a trade secret.

SEC. 5. NOTICE; PUBLIC AWARENESS CAMPAIGN.

    (a) Notice.--Any person who engages an individual who is employed 
by, or performs work under contract with, such person with respect to 
the activities of such person in or affecting commerce shall post and 
maintain notice of the provisions of this Act--

    (1) in a conspicuous place on the premises of such person; 
 or

    (2) in a conspicuous place where notices to employees and 
 applicants for employment are customarily posted physically or 
 electronically by such person.

    (b) Public Awareness Campaign.--The Secretary of Labor may carry 
out activities to make the public aware of the provisions of this Act.

SEC. 6. ENFORCEMENT.

    (a) Federal Trade Commission.--

    (1) Unfair or deceptive acts or practices.--A violation of 
 

section 3 or 5

    (a) shall be treated as a violation of a rule 
 defining an unfair or deceptive act or practice prescribed 
 under 

section 18

    (a)

    (1)
        (B) of the Federal Trade Commission Act 
 (15 U.S.C. 57a

    (a)

    (1)
        (B) ).

    (2) Powers of commission.--
        (A) In general.--The Federal Trade Commission shall 
 enforce sections 3 and 5

    (a) in the same manner, by the 
 same means, and with the same jurisdiction, powers, and 
 duties as though all applicable terms and provisions of 
 the Federal Trade Commission Act (15 U.S.C. 41 et seq.) 
 were incorporated into and made a part of this Act.
        (B) Privileges and immunities.--Any person who 
 violates 

section 3 or 5

    (a) shall be subject to the 
 penalties and entitled to the privileges and immunities 
 provided in the Federal Trade Commission Act (15 U.S.C. 
 41 et seq.).
            (C) Authority preserved.--Nothing in this Act shall 
 be construed to limit the authority of the Federal 
 Trade Commission under any other provision of law.

    (b) Department of Labor.--

    (1) In general.--The Secretary of Labor--
        (A) shall investigate as the Secretary determines 
 necessary to determine violations of 

section 3 or 5

    (a) by an employer; and
        (B) may, subject to paragraph

    (2) , bring an action 
 in any court of competent jurisdiction to obtain the 
 legal or equitable relief against an employer on behalf 
 of an individual aggrieved by the violation as may be 
 appropriate to effectuate the purposes of such 
 sections.

    (2) Statute of limitations.--An action described in 
 paragraph

    (1)
        (B) may not be commenced later than 4 years after 
 the date on which the violation occurred.

    (3) Regulations.--Not later than 18 months after the date 
 of enactment of this Act, the Secretary of Labor, in 
 consultation with the Chair of the Federal Trade Commission, 
 shall issue regulations as necessary to carry out this Act, 
 including with respect to the authority of the Secretary of 
 Labor to enforce violations of 

section 3 or 5

    (a) in accordance 
 with paragraph

    (1) .
            (c) Standards for Dual Enforcement.--Not later than 1 year after 
the date of enactment of this Act, the Federal Trade Commission and the 
Secretary of Labor shall, for the purposes of enforcing this Act--

    (1) develop shared standards for consistent enforcement; 
 and

    (2) identify the scope of responsibility of the Federal 
 Trade Commission and such scope of the Secretary of Labor to 
 ensure complementary enforcement of this Act.
            (d) Reporting Violations.--

    (1) In general.--The Federal Trade Commission and the 
 Secretary of Labor shall each establish a system to receive 
 complaints by individuals regarding alleged violations of 
 

section 3.

    (2) Confidentiality.--Except as otherwise required by law, 
 the Federal Trade Commission and the Secretary of Labor may not 
 disclose the identity or identifying information of any 
 individual providing a complaint under paragraph

    (1) , without 
 explicit consent from the individual.

    (e) Private Right of Action.--

    (1) In general.--An individual who is aggrieved by a 
 violation of this Act may bring a civil action in any 
 appropriate district court of the United States.

    (2) Relief.--In a civil action under paragraph

    (1) , a court 
 may award--
        (A) any actual damages sustained by the individual 
 as a result of the violation; and
        (B) in the case of any successful action, the costs 
 of the action and reasonable attorney's fees, as 
 determined by the court.

    (f) Enforcement by States.--

    (1) In general.--In any case in which the attorney general 
 of a State has reason to believe that an interest of the 
 residents of the State has been or is threatened or adversely 
 affected by any person who violates any provision of 

section 3 
 or 5

    (a) or any rule promulgated under this Act to carry out 
 such section, the attorney general of the State, as parens 
 patriae, may bring a civil action on behalf of the residents of 
 the State in an appropriate State court or an appropriate 
 district court of the United States to--
        (A) enjoin any further such violation by the 
 person;
        (B) compel compliance with 

section 3 or 5

    (a) or any 
 such rule;
            (C) obtain a permanent, temporary, or preliminary 
 injunction;
            (D) obtain damages, restitution, or other 
 compensation on behalf of the residents of the State; 
 or
        (E) obtain any other appropriate equitable relief.

    (2) Preservation of state powers.--Nothing in this 
 subsection shall be construed as altering, limiting, or 
 affecting the authority of the attorney general of a State to--
        (A) bring an action or other regulatory proceeding 
 arising solely under the laws in effect in that State; 
 or
        (B) exercise the powers conferred on the attorney 
 general by the laws of the State, including the ability 
 to conduct investigations, administer oaths or 
 affirmations, or compel the attendance of witnesses or 
 the production of documentary or other evidence.

    (g) Arbitration and Class Action.--Notwithstanding any other 
provision of law, no predispute arbitration agreement or predispute 
joint-action waiver shall be valid or enforceable with respect to any 
alleged violation of 

section 3 or 5

    (a) .

SEC. 7. REPORTS.

 Not later than 1 year after the date on which the Secretary of 
Labor issues any regulations under 

section 6

    (b)

    (3) , the Federal Trade 
Commission and the Secretary of Labor shall each submit to Congress a 
report on any actions taken by the Federal Trade Commission or 
Secretary, respectively, to enforce the provisions of this Act.

SEC. 8. DEFINITIONS.

 For purposes of this Act:

    (1) Business entity.--The term ``business entity'' means 
 any partnership (including a limited partnership or a limited 
 liability partnership), limited liability company (including a 
 series of a limited liability company formed under the laws of 
 a jurisdiction that recognizes such a series), or corporation.

    (2) Buyer.--The term ``buyer'', with respect to a business 
 entity, means any person who buys the goodwill of the business 
 entity, buys or otherwise acquires ownership interest in the 
 business entity, or buys a qualified asset or interest with 
 regard to the business entity.

    (3) Class action.--The term ``class action'' means a 
 lawsuit in which 1 or more parties seek or obtain class 
 treatment pursuant to rule 23 of the Federal Rules of Civil 
 Procedure or a comparable rule or provision of State law.

    (4) Commerce.--The term ``commerce'' has the meaning given 
 the term in 

section 3 of the Fair Labor Standards Act of 1938 
 (29 U.S.C. 203).

    (5) Employ; employee; employer.--The terms ``employ'', 
 ``employee'', and ``employer'' have the meanings given such 
 terms in 

section 3 of such Act (29 U.S.C. 203).

    (6) Noncompete agreement.--The term ``noncompete 
 agreement'' means an agreement, entered into after the date of 
 enactment of this Act between a person and an individual 
 performing work for the person, that restricts such individual, 
 after the working relationship between the person and 
 individual terminates, from performing--
        (A) any work for another person for a specified 
 period of time;
        (B) any work in a specified geographical area; or
            (C) any work for another person that is similar to 
 such individual's work for the person that is a party 
 to such agreement.

    (7) Owner of a business entity.--The term ``owner of a 
 business entity'' means--
        (A) in the case of a business entity that is a 
 partnership (including a limited partnership or a 
 limited liability partnership), any partner;
        (B) in the case of a business entity that is a 
 limited liability company (including a series of a 
 limited liability company formed under the laws of a 
 jurisdiction that recognizes such a series), any member 
 of such company; or
            (C) in the case of a business entity that is a 
 corporation, a capital stockholder of the business 
 entity who owns not less than 5 percent of the capital 
 stock.

    (8) Ownership interest.--The term ``ownership interest'' 
 means--
        (A) in the case of a business entity that is a 
 partnership (including a limited partnership or a 
 limited liability partnership), a partnership interest;
        (B) in the case of a business entity that is a 
 limited liability company (including a series of a 
 limited liability company formed under the laws of a 
 jurisdiction that recognizes such a series), a 
 membership interest; or
            (C) in the case of a business entity that is a 
 corporation, not less than 5 percent of the capital 
 stock of the business entity or, as applicable, a 
 subsidiary of the business entity.

    (9) Person.--The term ``person'' has the meaning given the 
 term in 

section 3 of the Fair Labor Standards Act of 1938 (29 
 U.S.C. 203).

    (10) Predispute arbitration agreement.--The term 
 ``predispute arbitration agreement'' means an agreement to 
 arbitrate a dispute that has not yet arisen at the time of the 
 making of the agreement.

    (11) Predispute joint-action waiver.--The term ``predispute 
 joint-action waiver'' means an agreement, whether or not part 
 of a predispute arbitration agreement, that would prohibit, or 
 waive the right of, one of the parties to the agreement to 
 participate in a joint, class, or collective action in a 
 judicial, arbitral, administrative, or other forum, concerning 
 a dispute that has not yet arisen at the time of the making of 
 the agreement.

    (12) Qualified asset or interest.--The term ``qualified 
 asset or interest'', with respect to a business entity, means 
 an asset or interest that is--
        (A) all or substantially all of the operating 
 assets and the goodwill of the business entity;
        (B) all or substantially all of the operating 
 assets of a division, or a subsidiary, of the business 
 entity and the goodwill of that division or subsidiary; 
 or
            (C) all of the ownership interest of any subsidiary 
 of the business entity.

    (13) Sale.--The term ``sale'', with respect to a business 
 entity, means the sale of the goodwill of the business entity, 
 the sale or other disposal of all of the ownership interest of 
 a seller in the business entity, or the sale of a qualified 
 asset or interest with regard to the business entity.

    (14) Seller.--The term ``seller'', with respect to a 
 business entity, means any person who sells the goodwill of the 
 business entity, any owner of the business entity selling or 
 otherwise disposing of all of his or her ownership interest in 
 the business entity, or any owner of the business entity that 
 sells a qualified asset or interest with regard to the business 
 entity.

    (15) Senior executive official.--The term ``senior 
 executive official'', with respect to a sale, means an official 
 who was acquired as an employee of the buyer in such sale 
 through the terms and conditions of the sale, and, on the day 
 before the date of such sale--
        (A) who was employed by the seller in such sale;
        (B) who was responsible for making or directing 
 major decisions of the seller; and
            (C) whose rate of compensation was in the highest 
 10 percent of the compensation rates for all employees 
 of the seller.

    (16) Trade secret.--The term ``trade secret'' has the 
 meaning given the term in 

section 1839 of title 18, United 
 States Code.
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