Support Grows for Young, Murphy Legislation to Protect American Workers and Limit the Use of Non-Compete Disclosures

WASHINGTON - U.S. Senators Todd Young (R-Ind.) and Chris Murphy (D-Conn.) noted growing support for the Workforce Mobility Act, bipartisan legislation to limit the use of non-compete clauses, which negatively impact almost one in every five American workers.

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.

In addition to Senators Young and Murphy, U.S. Senators Tim Kaine (D-Va.) and Kevin Cramer (R-N.D.) co-sponsored the legislation.

Below is a list of think tanks, non-profits, and advocacy organizations who have endorsed the Workforce Mobility Act:

"The Workforce Mobility Act is a no-cost, pro-worker, pro-growth reform that addresses a long-overlooked barrier to economic opportunity," said John Lettieri, President & CEO of the Economic Innovation Group. "Non-compete clauses suppress wages, stifle innovation, and block workers from pursuing better opportunities. Ending their widespread use will unlock talent, boost entrepreneurship, and make our economy more dynamic and competitive. EIG applauds Senators Young and Murphy for their bipartisan leadership on this critical issue."

"Noncompete clauses in emergency physicians' contracts hinder access to care and endanger patients. These clauses undermine the ability of emergency physicians to serve where they are needed most and to advocate for their patients. This bipartisan legislation is a vital step toward restoring fairness in the workforce and improving access to emergency care. We thank Senator Murphy and Senator Young for their leadership," said Robert Frolichstein, MD, FAAEM, FCCM, President, American Academy of Emergency Medicine.

"Banning restrictive noncompete clauses in employment contracts helps ensure that patients can continue seeing the physicians they trust, and that physicians can stay rooted in the communities they serve, even after changing jobs. The American Academy of Family Physicians supports the Workforce Mobility Act, which would ban most noncompete agreements and empower the FTC and Department of Labor to enforce the law," said Jen Brull, MD, FAAFP, President, American Academy of Family Physicians.

"Countless studies show that [non-compete agreements (NCAs)] can stifle employees' wages and limit job mobility. NCAs can also harm employers by limiting the talent pool available for hire. Federal legislation could incrementally or aggressively reform NCAs to promote a more dynamic employment market by removing barriers to employee mobility and fostering competition for talent among employers," said Isabella Hindley and Fred Ashton, American Action Forum in "Noncompete Agreements: Have Employers Gone Too Far?"

"As emergency physicians continue working to provide 24/7/365 access to lifesaving emergency care, our clinical autonomy is increasingly being eroded by coercive and exploitative non-compete clauses," said Alison Haddock, MD, FACEP, President, American College of Emergency Physicians (ACEP)."By prohibiting these predatory clauses, the Workforce Mobility Act empowers physicians to make the career decisions that work best for them. ACEP proudly supports this bipartisan legislation and we are deeply grateful to Senators Young and Murphy for their leadership on efforts to protect physician autonomy and promote career opportunities, rather than limiting them."

"Corporate abuse of non-compete agreements is a classic example of the reality, understood by economists since Adam Smith, that workers operate at an inherent disadvantage dealing with employers and need help to advance and protect their interests. Blind faith in markets has led inadvertently to a situation where millions of American workers cannot switch to better jobs, which is the opposite of what a well-functioning market would produce. Senators Young and Murphy deserve great credit for doing exactly what capitalism requires: setting rules within which competition will lead to prosperity for American families,"said Oren Cass, Chief Economist, American Compass.

"Building a 21st-century economy that works for all Americans requires worker empowerment, which requires mobility - the freedom to take a better job or launch a new business," said John Dearie, President of the Center for American Entrepreneurship (CAE). "By restricting the enforcement of noncompete agreements to only the most necessary of circumstances, theWorkforce Mobility Act empowers American workers and promotes a more dynamic and entrepreneurial U.S. economy, to the benefit of all Americans. CAE thanks Senators Todd Young (R-IN) and Chris Murphy (D-CT) for their leadership on this critical issue."

"The Workforce Mobility Act represents a step in the right direction towards changing the rules regarding non-competes. While California law represents perhaps the current gold standard for preventing the enforcement of many non-compete agreements across the state, efforts to eliminate or reduce the usage of non-competes on a nationwide scale and avoid a patchwork of state laws are welcome step for startups that already face numerous challenges in getting off the ground," said Kate Tummarello, Executive Director, Engine.

"We appreciate this effort from Sens. Young and Murphy to tackle the problem of noncompetes in employment contracts and believe this legislation deserves serious deliberation from lawmakers. The Insights Association has urged our members to devote their time and resources to keeping employees satisfied and motivated to fulfill their potential within the market research and analytics industry. We can't have our workforce on the sidelines or spending their resources litigating non-compete agreements. A federal approach that sets fair standards on their use and enforceability is in the best interests of both employers and employees," said Howard Fienberg, Senior Vice President of Advocacy, Insights Association.

"The National Employment Law Project applauds the reintroduction of theWorkforce Mobility Act, which would ban non-competes for most workers and, together with the Federal Trade Commission's rulemaking, would ensure that workers have the freedom to change jobs and the right to seek better pay and working conditions. We urge Congress to quickly pass the Workforce Mobility Act," said Judy Conti, Director of Government Affairs, National Employment Law Project.

"Non-compete agreements limit the flow of talent and ideas across industries. These restrictions prevent workers from accepting valuable career opportunities and hinder the nation's productivity. Our economy will be more dynamic when millions more Americans can independently choose where they work," said Will Raderman, Employment Policy Analyst, Niskanen Center.

"Non-compete clauses strengthen the power of employers at the expense of millions of workers across America. These unfair contracts reduce job market mobility and depress competition among employers for workers' services, lowering wages and wage growth and impeding new business creation. Banning non-competes across occupations and at all income levels, whether through legislation as the bipartisan group in the House and Senate propose or regulation as the FTC proposed last year, would be a major step in advancing workers' freedom in the labor market," said Sandeep Vaheesan, Legal Director, Open Markets Institute.

"Non-compete agreements are simply inconsistent with a free, open labor market. They cut wages, reduce mobility and hurt workers. Congress should assert its own power to pass a ban on non-competes and deliver results for American workers," said Eli Lehrer, President, R Street Institute.

"Legislation that narrows the circumstances under which non-compete agreements can be used would be a win for small businesses because It's clear that non-competes stifle small business growth. In fact, our research revealed that more than 33% of small business owners were prevented from hiring an employee due to a non-compete agreement, and nearly 50% said that they have been subject to a non-compete agreement that prevented them from starting or growing a business of their own. Placing reasonable restrictions on non-compete agreements will address these problems and help small businesses thrive," said John Arensmeyer, Founder and CEO, Small Business Majority.

"The Workforce Mobility Act is vital legislation that will allow the healthcare workforce to best serve our patients," said Srihari S. Naidu, MD, MSCAI, President, Society for Cardiovascular and Angiography & interventions (SCAI). "SCAI, the home for interventional cardiologists, supports the Workforce Mobility Act because protecting patient access to high-quality cardiovascular care depends on removing unnecessary barriers to trusted physicians and other medical professionals. Interventional cardiologists are in short supply, particularly in rural and underserved areas. We should protect the strong bond often created between patients and their doctors, who, in our case, perform life-changing procedures on arteries and valves. Non-compete clauses that force physicians to leave their patients unannounced can impact an entire community's access to trusted care."

"Running a rapidly growing business at Steam Logistics, we have seen firsthand how non-compete agreements hurt workers and employers alike and impede economic growth. They drive talented workers out of industries they've developed expertise in and shrink the pool of qualified candidates for employers trying to grow their businesses. The worst part is that non-competes are unnecessary: Employers have many other tools to protect their businesses, such as trade secrets laws and non-solicitation agreements. Saying anyone shouldn't compete is un-American, and I commend Senators Murphy and Young for their legislation to boost competition and strengthen our economy," said Steve Cox, President, Steam Logistics.

"Restrictive non-compete clauses place major constraints on cardiothoracic surgeons' ability to stay in their communities when transitioning to new employment. Eliminating this barrier will allow surgeons to pursue roles that match their goals, better serve patient needs, and provide greater stability for their families. It may also help address workforce shortages by allowing surgeons to practice where they're most needed," said Joseph F. Sabik III, MD, President, The Society of Thoracic Surgeons.

"We need to ensure that all US workers have the opportunity to earn a good life where they live. Work should be accessible, there should be dignity in it, and it should give everyone a shot at prosperity. We applaud the bipartisan, bicameral group of policymakers for coming together to narrow the use of non-compete agreements that helps to deliver on this promise," said Gabe Horwitz, Senior Vice President for the Economic Program, Third Way.

"Swift action to ban non-competes is an important step in advancing employee freedom, innovation, and the economy. People have a fundamental right to make their own career choices. These decisions impact their livelihoods and professional growth and should not be dictated by lawyers and corporations. This is about trusting employees. No one is motivated to do their best work under a cloud of threats or when locked into a job. The mobility of talent has created the most innovative companies in the world. Banning non-competes is good for business, innovation, and economic growth," said Peter Gassner, CEO of Veeva Systems, Inc. (NYSE: VEEV)

A one-pager on the bill is available here.