April 26, 2018

Wyden, Murphy, Warren Introduce Bill to Ban Unnecessary and Harmful Non-Compete Agreements

Washington, D.C. – Sens. Ron Wyden, D-Ore., Chris Murphy, D-Conn., and Elizabeth Warren, D-Mass., today introduced the Workforce Mobility Act to allow workers the freedom to pursue new jobs and higher wages without fear of legal action from their employers.

The new legislation would prohibit the use of non-compete agreements, while still allowing employers to protect their trade secrets. The bill would also require employers to notify employees that these agreements are illegal, and allow the U.S. Department of Labor to enforce the ban with fines on the employer.

In order to climb up the economic ladder, workers need to be able to seek higher wages either from their current employer or a new one. Yet that’s exactly what companies are preventing by forcing employees to sign non-compete clauses to get a job in the first place,” Wyden said. “It’s time to put the power back into the hands of working Americans and free them up to go after higher-paying jobs using the experience they’ve gained, rather than allow companies to keep workers stuck in jobs that are no longer providing a competitive wage.”

Non-compete agreements result in lower wages and diminished entrepreneurship as workers have little leverage to negotiate with their employer or leave for a better opportunity. Research shows that nearly 40 percent of American workers have been constrained by non-compete agreements at some point in their careers, and that they are common even among low-wage workers. Many believe that California’s ban on non-compete agreements has been a prime factor in the state’s growing economy.