0
Workforce Mobility Act of 2023
12/15/2023, 4:05 PM
Summary of Bill S 220
The bill seeks to limit the use of non-compete agreements by employers, which are contracts that restrict employees from working for a competitor after leaving their current job. These agreements have been criticized for limiting job mobility and stifling competition in the labor market.
Under the Workforce Mobility Act of 2023, non-compete agreements would be prohibited for low-wage workers, defined as those earning less than $15 per hour or $31,200 annually. Additionally, the bill would limit the duration of non-compete agreements for all other employees to a maximum of three months. The legislation also includes provisions to increase transparency around non-compete agreements, requiring employers to provide employees with written notice of the agreement at the time of hire. Employers would also be required to disclose the terms of the agreement in plain language and provide employees with the opportunity to seek legal counsel before signing. Overall, the Workforce Mobility Act of 2023 aims to promote job mobility and competition in the labor market by limiting the use of non-compete agreements and increasing transparency around their use. The bill is currently being debated in Congress and has garnered support from advocates for workers' rights and labor market competition.
Congressional Summary of S 220
Workforce Mobility Act of 2023
This bill prohibits the use of noncompete agreements in the context of commercial enterprises except under certain circumstances.
The first exception is that the seller of a business entity may enter into an agreement to refrain from engaging in a similar business in the geographic area where the business being sold has conducted business prior to the agreement. This exception extends to agreements by senior executive officials who have a severance agreement as part of the conditions of sale (i.e., a buyout provision). Second, a partner of an enterprise may enter into an agreement that, upon dissolution of the partnership or dissociation of the partner from the partnership, the partner will refrain from engaging in a similar business in the geographic areas where the partnership has conducted business prior to the agreement.
Commercial enterprises must post notice of the prohibition of noncompete agreements under this bill in a conspicuous area of the workplace and conduct a public awareness campaign to inform the public of the provisions of this bill.
The Federal Trade Commission or the Department of Labor shall investigate or enforce the provisions of the bill. Individuals and state attorneys general may also bring civil actions to enforce the provisions of the bill.
