Sponsors (4)
The bill shifts the balance strongly toward worker mobility and stronger enforcement of post‑employment restrictions at the cost of higher adjustment, compliance and litigation burdens for employers, some legal ambiguity during transition, and potential substitution of other restrictive tools.
Most employees (including gig and contract workers) gain substantially greater ability to change jobs, start businesses, or negotiate pay because broad post‑employment noncompete agreements are largely prohibited.
Increased labor mobility should boost innovation, business formation, and consumer choice in local markets as experienced workers can more readily found or join new firms.
Employers retain tools to protect legitimate business interests—confidentiality, trade‑secret and IP protections are expressly permitted—enabling firms to share sensitive information with partners and contractors while protecting assets.
Many employers (especially small firms) may face higher turnover and lose returns on training or other investments, which could raise business costs, reduce hiring or local investment, and ultimately affect wages or prices.
The law will likely increase litigation and enforcement costs for employers (damages, fee awards) and add caseload pressure on courts because predispute arbitration and class‑action waivers are barred for these claims.
Firms may substitute other restrictive measures (non‑solicitations, broad confidentiality clauses) and litigate trade‑secret boundaries more aggressively, raising legal uncertainty and the risk that NDAs are used to hide wrongdoing or chill whistleblowers.
Based on analysis of 8 sections of legislative text.
Makes most noncompete agreements void nationwide, preserves narrow sale‑related exceptions, protects trade‑secret NDAs, and creates FTC/DOL enforcement plus private suits.
Official title: Prohibit certain noncompete agreements, and for other purposes.
Introduced June 11, 2025 by Christopher Murphy · Last progress June 11, 2025
Bans most post‑employment noncompete agreements that restrict a worker’s ability to work after leaving a job and makes those agreements void nationwide, while preserving narrow exceptions for certain business sales, partnership dissolutions, and limited senior‑executive deals. It preserves and strengthens protections for trade secrets, requires employers to post notice of the law, and gives the FTC and Department of Labor authority to enforce the ban and bring or support private and public lawsuits, with private remedies, fee shifting, and limits on pre‑dispute arbitration or class‑action waivers for these claims. The bill also directs the FTC and DOL to coordinate enforcement, requires public agency reports to Congress, and sets clear definitions (e.g., who counts as a senior executive, ownership thresholds, and what counts as a noncompete or trade secret).