Workforce Mobility Act 2026

Summary#

This bill would ban most noncompete agreements between a person (usually an employer) and an individual who works for that person in or affecting commerce. If passed, these noncompete agreements would have no force or effect except in limited situations. The main exceptions are: (1) an agreement tied to the sale of a business that prevents the seller from running a like business in a specified geographic area where the business previously operated; (2) partnership dissolution or disassociation agreements tied to areas where the partnership did business; and (3) certain noncompetes for senior executive officials tied to a business sale, limited to no more than one year and tied to a severance agreement that pays about one year of expected compensation. The bill preserves the ability to use agreements that protect trade secrets and nondisclosure of confidential information. Employers would have to post notice of the law where employee notices are customarily posted. The Federal Trade Commission (FTC) would treat violations as unfair or deceptive acts and could enforce the law under its existing powers. The Department of Labor (DOL) may investigate and bring actions, must issue regulations within 18 months, and must coordinate enforcement standards with the FTC. The bill creates complaint systems at the FTC and DOL, protects complainant confidentiality, allows individuals to sue in federal court for actual damages and attorney fees, and allows state attorneys general to sue on behalf of residents. Predispute arbitration agreements and predispute joint-action waivers would not be enforceable for claims under this law. Agencies must report to Congress on enforcement actions after regulations are issued.

What it means for you#

• Workers: Most noncompete agreements signed after this law would be void, so workers could generally take new jobs without those limits. Workers could file complaints with the FTC or DOL and bring a federal lawsuit to seek damages and attorney fees. Employers must post a notice about the law where employee notices are usually posted.
• Employers: Employers may not enter into or enforce most noncompete agreements after the law takes effect. Employers can still use trade secret protections and nondisclosure agreements. Limited noncompetes are allowed for business sales, partnership breakups, and some senior executives under specific conditions. Employers can be investigated and sued by the FTC, the DOL, state attorneys general, or private individuals, and cannot rely on predispute arbitration or class-waiver clauses to block these claims.
• Buyers and sellers in business sales: The bill allows sale-related noncompetes that specify a geographic area where the business had operated and, in some cases, short noncompetes for senior executives tied to severance.

Expenses#

No publicly available information.

Proponents' View#

The bill text states that noncompete agreements are widespread (affecting about 1 in 5 workers), reduce wages, limit worker mobility, slow innovation, and hurt national productivity. It asserts that employers already have other legal tools (trade secret law, intellectual property, and nondisclosure agreements) to protect legitimate business interests without broad noncompete restrictions.

Opponents' View#

No publicly available information.