On February 1, 2023, a coalition of U.S. Senators and Members of the House of Representatives reintroduced a bill titled the Workforce Mobility Act (the “Act”), seeking to prohibit the use and enforcement of post-employment non-competition agreements. The bill had been previously introduced in 2018, 2019, and 2021, but it was stalled each time and did not make it to a committee vote.  If enacted, the Act would empower the Federal Trade Commission (“FTC”), the U.S. Department of Labor, and state Attorneys General to investigate and enforce a sweeping ban on non-compete agreements.  The Act would also provide aggrieved individuals with a private right of action in which they could recover actual damages and attorneys’ fees.  Additionally, it would require employers to make their employees aware of the limitations on non-compete agreements by posting a notice in the workplace.

The Act defines “noncompete agreement” as:

an agreement … between a person and an individual performing work for the person, that restricts such individual from performing, after the working relationship between the person and individual terminates, any of the following: (A) [a]ny work for another person for a specified period of time; (B) [a]ny work in a specified geographical area; (C) [a]ny work for another person that is similar to such individual’s work for the person that is a party to such agreement.

Workforce Mobility Act, S. ___, 118th Cong. § 8 (2023).

The Act provides for limited exceptions, including certain non-compete agreements executed in the sale of a business or the dissolution of a partnership.  While non-compete agreements would remain permissible for owners and senior executives of businesses in these limited contexts, the Act would impose limitations on these agreements, including a maximum duration of one year.

The Act also clarifies that it does not preclude confidentiality agreements protecting trade secrets:

[n]othing in this Act shall preclude a person from entering into an agreement with an individual working for the person to not share any information (including after the individual is no longer working for the person) regarding the person, or the work performed by the individual for the person, that is a trade secret.

Id. at § 4.  Notably, the Act is silent on non-solicitation clauses.

The proposal of the Act follows on the heels of the FTC’s proposed rule seeking a similar prohibition on non-compete agreements, which is currently pending comment and which we discuss here.    The timing of the proposed legislation is notable in view of the likelihood that the FTC will face significant challenges to its authority to implement its proposed rule.  And the above-referenced rights of action in the Act make it more daunting than the FTC’s proposed rule.

Notably, the Act has received bipartisan support. The legislation was introduced in the Senate by Senators Chris Murphy (D-Conn.) and Todd Young (R- Ind.), and co-sponsored by Senators Tim Kaine (D-Va.) and Kevin Cramer (R-N.D.) and in the House of Representatives by U.S. Representatives Scott Peters (D-Cal.-52) and Mike Gallagher (R-Wis.-08).

We will continue monitoring and providing updates on the Act and the FTC’s proposed rule.

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Photo of Steven J. Pearlman Steven J. Pearlman

Steven J. Pearlman is a partner in the Labor & Employment Law Department, where he is Head of the Restrictive Covenants, Trade Secrets & Unfair Competition Group and Co-Head of the Whistleblowing & Retaliation Group.

Employment, Whistleblower, Restrictive Covenant and Trade Secret Practice.

Steven J. Pearlman is a partner in the Labor & Employment Law Department, where he is Head of the Restrictive Covenants, Trade Secrets & Unfair Competition Group and Co-Head of the Whistleblowing & Retaliation Group.

Employment, Whistleblower, Restrictive Covenant and Trade Secret Practice. Steven’s national practice focuses on defending companies in federal and state courts and arbitration against claims of: discrimination, retaliation and harassment, including claims brought by high-level executives; whistleblower retaliation; restrictive covenant violations; theft of trade secrets; and wage-and-hour violations (including class, collective and PAGA actions).

Illustrating his versatility, Steven has successfully handled bench and jury trials in multiple jurisdictions (e.g., Illinois, California, Florida and Texas); defended one of the largest Illinois-only class actions in the history of the federal courts in Chicago; and prevailed following his oral arguments before the Seventh Circuit and state appellate courts. Steven brings his litigation experience to bear in counseling clients to minimize risk and avoid or prepare for success in litigation.

Investigations. Reporting to boards of directors, their audit committees, CEOs and in-house counsel, Steven conducts sensitive investigations and has testified in federal court. His investigations have involved complaints of sexual harassment involving C-suite officers; systemic violations of employment laws and company policies; and fraud, compliance failures and unethical conduct.

Thought Leadership and Accolades. Steven was named Lawyer of the Year for Chicago Labor & Employment Litigation in the 2023 edition of The Best Lawyers in America. He was also named as One of the Top 10 Impactful Labor & Employment Lawyers in Illinois for 2023 by Business Today. He is a Fellow of the College of Labor and Employment Lawyers. Chambers describes Steven as an “outstanding lawyer” who is “very sharp and very responsive,” a “strong advocate,” and an “expert in his field.” Chambers also reports that “He is someone who can navigate the twists and turns of litigation without difficulty. Steven is great with brief-writing, crafting arguments, and making sure the client is always happy.”

Steven was 1 of 12 individuals selected by Compliance Week as a “Top Mind.” Earlier in his career, he was 1 of 5 U.S. lawyers selected by Law360 as a “Rising Star Under 40” in the area of employment law and 1 of “40 Illinois Attorneys Under Forty to Watch” selected by Law Bulletin Publishing Company. Steven is a Burton Award Winner (U.S. Library of Congress) for “Distinguished Legal Writing.”

Steven was appointed to Law360’s Employment Editorial Advisory Board and selected as a Contributor to Forbes.com. He has appeared on Bloomberg News (television and radio) and Yahoo! Finance, and is often quoted in leading publications such as The Wall Street Journal.

The U.S. Chamber of Commerce has engaged Steven to serve as lead counsel on amicus briefs to the U.S. Supreme Court and federal circuit courts of appeal. He was appointed to serve as a Special Assistant Attorney General for the State of Illinois in employment litigation matters. He has presented with the Solicitor of the DOL, the Acting Chair of the EEOC, an EEOC Commissioner, Legal Counsel to the EEOC, and heads of the SEC, CFTC and OSHA whistleblower programs. He is also a member of the Sedona Conference, focusing on trade secret matters.

In 2024, Steven received the Excellence in Pro Bono Service Award from the United States District Court for the Northern District of Illinois and the Chicago Chapter of the Federal Bar Association.

Photo of Alexandra Oxyer Alexandra Oxyer

Alexandra “Alex” S. Oxyer is an associate in the Labor & Employment Law Department.

Alex concentrates her practice in complex employment litigation and employment law counseling, including advising clients on issues related to hiring and firing, workplace investigations, employment policies, and wage and…

Alexandra “Alex” S. Oxyer is an associate in the Labor & Employment Law Department.

Alex concentrates her practice in complex employment litigation and employment law counseling, including advising clients on issues related to hiring and firing, workplace investigations, employment policies, and wage and hour compliance. She regularly defends companies in all aspects of employment litigation, including claims of discrimination, harassment and retaliation, and breach of restrictive covenants (e.g., noncompetition and nonsolicitation). She has handled such cases before state and federal courts throughout the country, as well as before the U.S. Equal Employment Opportunity Commission, the Illinois Department of Human Rights, the Indiana Civil Rights Commission, the American Arbitration Association, and the Department of Labor.

Prior to joining Proskauer, Alex was a cum laude graduate from Indiana University Maurer School of Law. She previously practiced at a national management-side employment law firm, and in addition to her experience in private practice, Alex also worked as in-house counsel for a large public university. As in-house counsel, Alex investigated, managed, and resolved a wide range of disputes in the student affairs and employment areas, including single and multi-plaintiff discrimination, harassment, retaliation, and wage & hour issues.