Sen. Kaine cosponsors bill to limit the use of non-compete agreements for American workers
WASHINGTON D.C. (WSET) — A new piece of bipartisan legislation could change the way your employer builds out its contracts.
On Wednesday, U.S. Senator Chris Murphy (D-Conn.) and U.S. Senator Todd Young (R-Ind.) reintroduced the Workforce Mobility Act aimed at limiting the use of non-compete agreements that negatively impact American workers.
U.S. Representative Scott Peters (D-Calif.-52) and U.S. Representative Mike Gallagher (R-Wis.-08) introduced the legislation in the U.S. House of Representatives. U.S. Senator Tim Kaine (D-Va.) and U.S. Senator Kevin Cramer (R-N.D.) co-sponsored the legislation.
SEE ALSO: Engineered BioPharmaceuticals, Inc. invests $6.1M to expand in Danville
The lawmakers said almost one in five American workers, 30 million people, are constrained by a non-compete agreement, which blocks workers from working for a competing employer or starting a competing business.
Research cited by the lawmakers indicates that workers trapped by non-competes have lower wages, and their restricted mobility makes it more difficult for businesses to recruit talent.
“Companies shouldn’t be able to restrict Americans’ freedom to pursue different jobs,” said Kaine. “Non-compete agreements suppress wages, make it harder for businesses to hire talent, and hinder our economic growth. I’m proud to join my colleagues in introducing this bill to support workers.”
SEE ALSO: $53,000 in damages from accidental house fire in Roanoke
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;
- Charge the Federal Trade Commission and the Department of Labor with enforcement, as well as making explicit a private right of action in federal court;
- 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.
Last month, Murphy, Young, Kaine, and Cramer applauded the FTC’s proposed rule banning employers from imposing non-compete agreements on their employees.
