Workforce Mobility Act: Non-Compete Ban, Exceptions, and Notice

The Workforce Mobility Act is a proposed federal bill that would ban most non-compete agreements nationwide, with narrow exceptions tied to business sales and partnerships. It is not law. First introduced in the Senate in 2023 as S. 220, it was reintroduced in June 2025 as S. 2031 and currently sits in the Committee on Health, Education, Labor, and Pensions.¹ Until Congress acts, non-competes remain governed by state law.

What the Bill Would Ban

If enacted, the Act would make it illegal for any employer to enter into, enforce, or attempt to enforce a non-compete agreement with a worker. The bill defines a non-compete as any agreement that, after the working relationship ends, restricts someone from working for another employer for a set period, in a specific geographic area, or in a role similar to the one they held.² Existing non-competes covered by the prohibition would become unenforceable.

Coverage is broad. Anyone who “performs work under contract with” an employer is protected, which sweeps in independent contractors and freelancers alongside traditional employees.² The bill uses the phrase “in or affecting commerce,” standard federal jurisdictional language that reaches most private-sector businesses regardless of size.

The Narrow Exceptions

The bill preserves non-competes in two ownership-related situations. Both are tied to genuine financial transactions rather than the ordinary employer-employee relationship.

Sale of a Business

When someone sells a business, the buyer can require the seller to refrain from competing in a specified geographic area, so long as the buyer or someone who acquires the goodwill of that business operates a similar business in that area.² The exception protects what the buyer actually paid for: the customer relationships and reputation that would be worthless if the seller reopened next door.

Senior executives who join the buyer as employees can also be subject to a non-compete, but only under two conditions. The restriction cannot last longer than one year, and the executive must have a severance agreement guaranteeing compensation equal to at least one year’s expected pay if terminated. The bill defines a “senior executive official” as someone who directed major decisions for the seller and whose pay was in the top 10 percent of all the seller’s employees.² Middle managers and rank-and-file staff who come along in an acquisition do not qualify.

Partnership Dissolution

When a partnership dissolves or a partner leaves, the departing partner can agree to refrain from running a competing business within a specified geographic area.² The logic tracks the business-sale exception: the remaining partners have a legitimate interest in the goodwill they built together, and the departing partner’s ownership stake means the restriction is tied to a real financial exit.

What the Bill Would Not Touch

Trade secret protection stays in place. The text specifically states that nothing in the Act prevents an employer from requiring a worker to keep confidential any information that qualifies as a trade secret, both during and after the working relationship.² The findings section reinforces the point, noting that employers already have adequate legal protection through trade secret law, intellectual property, and non-disclosure agreements.

Non-solicitation agreements, which prevent workers from recruiting former colleagues or clients, are not explicitly addressed. Whether one would count as a “non-compete” under the bill would likely turn on whether a court views it as effectively restricting someone from working for a competitor. Employers relying on narrow non-solicitation clauses rather than broad non-competes would be in a much stronger position under this framework.

Garden leave arrangements, where an employer pays a worker to stay home during a notice period, are also not explicitly addressed. Because the worker is still employed and being paid, these arrangements may fall outside the bill’s definition, which targets restrictions taking effect “after the working relationship terminates.”

h2>How It Would Be Enforced

The Federal Trade Commission and the Department of Labor would share enforcement authority. Either agency could investigate violations and bring actions against employers who enter into or try to enforce prohibited non-competes.²

Workers could also sue on their own. The bill creates a private right of action in federal court, and a successful plaintiff could recover actual damages, court costs, and reasonable attorney’s fees.² Actual damages in this context would typically mean lost wages from a job the worker couldn’t take, or income lost while sitting out a non-compete that should never have been enforced. The attorney’s fees provision matters because it lowers the financial barrier for workers who could not otherwise afford to challenge a well-funded employer.

Employer Notice Requirement

Every employer would need to post a notice explaining the Act’s provisions, either in a conspicuous place on the premises or wherever the employer customarily posts employee notices, whether a physical bulletin board or an electronic platform.² The Secretary of Labor, in consultation with the FTC, would also run a public awareness campaign about workers’ rights under the Act. Businesses with remote-only workforces would need to make sure the notice actually reaches workers electronically.

Where the Bill Stands and What Governs You Now

The Workforce Mobility Act has been introduced multiple times with bipartisan sponsorship but has never advanced past committee. The 2023 version, S. 220, was referred to the Senate Committee on Health, Education, Labor, and Pensions and saw no further action.³ The 2025 reintroduction, S. 2031, landed in the same committee in June 2025 and remains there.¹

Because the bill is pending, it does not affect any non-compete you have signed today. Enforceability turns on the law of the state where you work: four states ban employment non-competes entirely, 34 states and the District of Columbia restrict them in some form through income thresholds, industry-specific rules, or scope limits, and the rest apply a general “reasonableness” standard.⁴ If you are bound by a non-compete right now, the question that matters is what your state allows, not what this bill says.

1
Congress.gov. S.2031 – Workforce Mobility Act of 2025 119th Congress (2025-2026)
2
Congress.gov. S.220 – Workforce Mobility Act of 2023 Text
3
Congress.gov. S.220 – Workforce Mobility Act of 2023 118th Congress (2023-2024)
4
Economic Innovation Group. State Noncompete Law Tracker