I 

118TH CONGRESS 

1ST SESSION H. R. 731 

To prohibit certain noncompete agreements, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 1, 2023 

Mr. PETERS (for himself, Mr. GALLAGHER, and Ms. ESHOO) introduced the 

following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committee on Education and the Workforce, for a period to be subsequently determined by the Speaker, in each 

case for consideration of such provisions as fall within the jurisdiction of 

the committee concerned 

A BILL 

To prohibit certain noncompete agreements, and for other 

purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Workforce Mobility 

5 Act of 2023’’. 

6 SEC. 2. FINDINGS. 

7 Congress finds the following: 

8 (1) The proliferation of noncompete agreements 

9 throughout sectors, occupational categories, and inVerDate Sep 11 2014 00:10 Feb 22, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H731.IH H731

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1 come brackets is contrary to the commitment of 

2 Congress to foster stronger wage growth for workers 

3 in the United States. Economists now estimate that 

4 1 in 5 workers is covered by a noncompete agree5 ment. 

6 (2) Noncompete agreements are blunt instru7 ments that crudely protect employer interests and 

8 place a drag on national productivity by forcing cov9 ered workers to either idle for long periods of time 

10 or leave the industries in which the workers have 

11 honed their skills altogether. 

12 (3) Enforceable noncompete agreements also re13 duce wages, restrict worker mobility, impinge on the 

14 freedom of a worker to maximize labor market po15 tential, and slow the pace of innovation in the 

16 United States. 

17 (4) Employers have access to legal recourses to 

18 protect their legitimate interests and property, in19 cluding trade secret protections, intellectual property 

20 protections, and nondisclosure agreements that do 

21 not inflict broad collateral harm on the labor market 

22 prospects for workers. 

23 (5) Employers that rely on a list or lists of ven24 dors, customers, or clients that are not easily ob25 tained by an individual through means other than 


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1 the work relationship have adequate legal protection 

2 through the use of trade secret protections and non3 disclosure agreements. 

4 (6) Noncompete agreements broadly restrict 

5 employment options for workers in the United States 

6 when more narrowly targeted remedies are readily 

7 available to employers. 

8 (7) Fostering an environment where employers 

9 can flourish is necessary to promote vitality and 

10 prosperity in the economy. 

11 (8) Employers may retain critical skilled em12 ployees while ensuring that disincentives affecting 

13 mobility, including noncompete agreements, do not 

14 negatively impact the workforce in the United 

15 States. 

16 SEC. 3. PROHIBITING NONCOMPETE AGREEMENTS. 

17 (a) PROHIBITION.— 

18 (1) IN GENERAL.—Except as provided in sub19 section (b), no person shall enter into, enforce, or at20 tempt to enforce a noncompete agreement with any 

21 individual who is employed by, or performs work 

22 under contract with, such person with respect to the 

23 activities of such person in or affecting commerce. 

24 (2) EFFECT OF AGREEMENTS.—Except as pro25 vided in subsection (b), a noncompete agreement deVerDate Sep 11 2014 00:10 Feb 22, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H731.IH H731

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1 scribed in paragraph (1) shall have no force or ef2 fect. 

3 (b) EXCEPTIONS.— 

4 (1) SALE OF GOODWILL OR OWNERSHIP INTER5 EST.— 

6 (A) IN GENERAL.—A seller of a business 

7 entity may enter into an agreement with the 

8 buyer to refrain from carrying on a like busi9 ness within a specified geographic area de10 scribed in subparagraph (C), if the buyer, or 

11 any person deriving title to the goodwill of the 

12 business entity or an ownership interest in the 

13 business entity from the buyer, carries on a like 

14 business in such specified geographic area. 

15 (B) SENIOR EXECUTIVE OFFICIALS WITH

16 SEVERANCE AGREEMENTS.— 

17 (i) IN GENERAL.—Subject to clause 

18 (ii), a buyer or seller of a business entity 

19 may enter into a noncompete agreement 

20 with a senior executive official who has a 

21 severance agreement described in clause 

22 (iii) that restricts the senior executive offi23 cial from performing, within a specified ge24 ographic area described in subparagraph 

25 (C), any work that is similar to the work 


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1 that the senior executive official performed 

2 for the buyer or seller, if the buyer, or any 

3 person deriving title to the goodwill of the 

4 business entity or an ownership interest in 

5 the business entity from the buyer, carries 

6 on a like business in such specified geo7 graphic area. 

8 (ii) TIME-LIMITED AGREEMENT.—A 

9 noncompete agreement described in clause 

10 (i) may not restrict the senior executive of11 ficial as described in such clause for a pe12 riod that is more than one year. 

13 (iii) SEVERANCE AGREEMENT.—A 

14 severance agreement described in this 

15 clause is an agreement between the buyer 

16 or seller of a business entity and a senior 

17 executive official that— 

18 (I) is part of the terms and con19 ditions of the sale; and 

20 (II) requires monetary compensa21 tion for the senior executive official in 

22 the event of termination of the em23 ployment of the senior executive offi24 cial at an amount that is not less than 

25 the compensation that the senior execVerDate Sep 11 2014 00:10 Feb 22, 2023 Jkt 039200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H731.IH H731

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1 utive official is or would be reasonably 

2 expected to receive from the buyer 

3 during the 1-year period following the 

4 sale. 

5 (C) SPECIFIED GEOGRAPHIC AREA.—A 

6 specified geographic area described in this sub7 paragraph is a geographic area— 

8 (i) that is specified in an agreement 

9 described in subparagraph (A), or a non10 compete agreement described in subpara11 graph (B), regarding a business entity; 

12 and 

13 (ii) in which such business entity, in14 cluding any division or subsidiary of such 

15 business entity, conducted business prior 

16 to the agreement or noncompete agree17 ment. 

18 (2) PARTNERSHIP DISSOLUTION OR DISASSO19 CIATION.— 

20 (A) IN GENERAL.—Any partner of a part21 nership may enter into an agreement with any 

22 other member of the partnership that, upon the 

23 dissolution of the partnership or dissociation of 

24 the partner from such partnership, the partner 

25 will refrain from carrying on a like business 


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1 within a specified geographic area described in 

2 subparagraph (B), if any other member of the 

3 partnership, or any person deriving title to the 

4 partnership or the goodwill of the partnership 

5 from any other member of the partnership, car6 ries on a like business in such specified geo7 graphic area. 

8 (B) SPECIFIED GEOGRAPHIC AREA.—A 

9 specified geographic area described in this sub10 paragraph is a geographic area— 

11 (i) that is specified in an agreement 

12 described in subparagraph (A); and 

13 (ii) in which any business of the part14 nership has been transacted prior to the 

15 agreement. 

16 SEC. 4. TRADE SECRETS. 

17 Nothing in this Act shall preclude a person from en18 tering into an agreement with an individual who is em19 ployed by, or performs work under contract with, such per20 son with respect to the activities of such person in or af21 fecting commerce to not disclose any information (includ22 ing after the individual is no longer employed or per23 forming work for the person) regarding the person, or the 

24 work performed by the individual for the person, that is 

25 a trade secret. 


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1 SEC. 5. NOTICE; PUBLIC AWARENESS CAMPAIGN. 

2 (a) NOTICE.—Any person who engages an individual 

3 who is employed by, or performs work under contract with, 

4 such person with respect to the activities of such person 

5 in or affecting commerce shall post and maintain notice 

6 of the provisions of this Act— 

7 (1) in a conspicuous place on the premises of 

8 such person; or 

9 (2) in a conspicuous place where notices to em10 ployees and applicants for employment are custom11 arily posted physically or electronically by such per12 son. 

13 (b) PUBLIC AWARENESS CAMPAIGN.—The Secretary 

14 of Labor may carry out activities to make the public aware 

15 of the provisions of this Act. 

16 SEC. 6. ENFORCEMENT. 

17 (a) FEDERAL TRADE COMMISSION.— 

18 (1) UNFAIR OR DECEPTIVE ACTS OR PRAC19 TICES.—A violation of section 3 or 5(a) shall be 

20 treated as a violation of a rule defining an unfair or 

21 deceptive act or practice prescribed under section 

22 18(a)(1)(B) of the Federal Trade Commission Act 

23 (15 U.S.C. 57a(a)(1)(B)). 

24 (2) POWERS OF COMMISSION.— 

25 (A) IN GENERAL.—The Federal Trade 

26 Commission shall enforce sections 3 and 5(a) in 


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1 the same manner, by the same means, and with 

2 the same jurisdiction, powers, and duties as 

3 though all applicable terms and provisions of 

4 the Federal Trade Commission Act (15 U.S.C. 

5 41 et seq.) were incorporated into and made a 

6 part of this Act. 

7 (B) PRIVILEGES AND IMMUNITIES.—Any 

8 person who violates section 3 or 5(a) shall be 

9 subject to the penalties and entitled to the 

10 privileges and immunities provided in the Fed11 eral Trade Commission Act (15 U.S.C. 41 et 

12 seq.). 

13 (C) AUTHORITY PRESERVED.—Nothing in 

14 this Act shall be construed to limit the author15 ity of the Federal Trade Commission under any 

16 other provision of law. 

17 (b) DEPARTMENT OF LABOR.— 

18 (1) IN GENERAL.—The Secretary of Labor— 

19 (A) shall investigate as the Secretary de20 termines necessary to determine violations of 

21 section 3 or 5(a) by an employer; and 

22 (B) may, subject to paragraph (2), bring 

23 an action in any court of competent jurisdiction 

24 to obtain the legal or equitable relief against an 

25 employer on behalf of an individual aggrieved 


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1 by the violation as may be appropriate to effec2 tuate the purposes of such sections. 

3 (2) STATUTE OF LIMITATIONS.—An action de4 scribed in paragraph (1)(B) may not be commenced 

5 later than 4 years after the date on which the viola6 tion occurred. 

7 (3) REGULATIONS.—Not later than 18 months 

8 after the date of enactment of this Act, the Sec9 retary of Labor, in consultation with the Chair of 

10 the Federal Trade Commission, shall issue regula11 tions as necessary to carry out this Act, including 

12 with respect to the authority of the Secretary of 

13 Labor to enforce violations of section 3 or 5(a) in 

14 accordance with paragraph (1). 

15 (c) STANDARDS FOR DUAL ENFORCEMENT.—Not 

16 later than 1 year after the date of enactment of this Act, 

17 the Federal Trade Commission and the Secretary of Labor 

18 shall, for the purposes of enforcing this Act— 

19 (1) develop shared standards for consistent en20 forcement; and 

21 (2) identify the scope of responsibility of the 

22 Federal Trade Commission and such scope of the 

23 Secretary of Labor to ensure complementary en24 forcement of this Act. 

25 (d) REPORTING VIOLATIONS.— 


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1 (1) IN GENERAL.—The Federal Trade Commis2 sion and the Secretary of Labor shall each establish 

3 a system to receive complaints by individuals regard4 ing alleged violations of section 3. 

5 (2) CONFIDENTIALITY.—Except as otherwise 

6 required by law, the Federal Trade Commission and 

7 the Secretary of Labor may not disclose the identity 

8 or identifying information of any individual pro9 viding a complaint under paragraph (1), without ex10 plicit consent from the individual. 

11 (e) PRIVATE RIGHT OF ACTION.— 

12 (1) IN GENERAL.—An individual who is ag13 grieved by a violation of this Act may bring a civil 

14 action in any appropriate district court of the 

15 United States. 

16 (2) RELIEF.—In a civil action under paragraph 

17 (1), a court may award— 

18 (A) any actual damages sustained by the 

19 individual as a result of the violation; and 

20 (B) in the case of any successful action, 

21 the costs of the action and reasonable attor22 ney’s fees, as determined by the court. 

23 (f) ENFORCEMENT BY STATES.— 

24 (1) IN GENERAL.—In any case in which the at25 torney general of a State has reason to believe that 


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1 an interest of the residents of the State has been or 

2 is threatened or adversely affected by any person 

3 who violates any provision of section 3 or 5(a) or 

4 any rule promulgated under this Act to carry out 

5 such section, the attorney general of the State, as 

6 parens patriae, may bring a civil action on behalf of 

7 the residents of the State in an appropriate State 

8 court or an appropriate district court of the United 

9 States to— 

10 (A) enjoin any further such violation by 

11 the person; 

12 (B) compel compliance with section 3 or 

13 5(a) or any such rule; 

14 (C) obtain a permanent, temporary, or pre15 liminary injunction; 

16 (D) obtain damages, restitution, or other 

17 compensation on behalf of the residents of the 

18 State; or 

19 (E) obtain any other appropriate equitable 

20 relief. 

21 (2) PRESERVATION OF STATE POWERS.—Noth22 ing in this subsection shall be construed as altering, 

23 limiting, or affecting the authority of the attorney 

24 general of a State to— 


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1 (A) bring an action or other regulatory 

2 proceeding arising solely under the laws in ef3 fect in that State; or 

4 (B) exercise the powers conferred on the 

5 attorney general by the laws of the State, in6 cluding the ability to conduct investigations, ad7 minister oaths or affirmations, or compel the 

8 attendance of witnesses or the production of 

9 documentary or other evidence. 

10 (g) ARBITRATION AND CLASS ACTION.—Notwith11 standing any other provision of law, no predispute arbitra12 tion agreement or predispute joint-action waiver shall be 

13 valid or enforceable with respect to any alleged violation 

14 of section 3 or 5(a). 

15 SEC. 7. REPORTS. 

16 Not later than 1 year after the date on which the 

17 Secretary of Labor issues any regulations under section 

18 6(b)(3), the Federal Trade Commission and the Secretary 

19 of Labor shall each submit to Congress a report on any 

20 actions taken by the Federal Trade Commission or Sec21 retary, respectively, to enforce the provisions of this Act. 

22 SEC. 8. DEFINITIONS. 

23 For purposes of this Act: 

24 (1) BUSINESS ENTITY.—The term ‘‘business 

25 entity’’ means any partnership (including a limited 


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1 partnership or a limited liability partnership), lim2 ited liability company (including a series of a limited 

3 liability company formed under the laws of a juris4 diction that recognizes such a series), or corporation. 

5 (2) BUYER.—The term ‘‘buyer’’, with respect to 

6 a business entity, means any person who buys the 

7 goodwill of the business entity, buys or otherwise ac8 quires ownership interest in the business entity, or 

9 buys a qualified asset or interest with regard to the 

10 business entity. 

11 (3) CLASS ACTION.—The term ‘‘class action’’ 

12 means a lawsuit in which 1 or more parties seek or 

13 obtain class treatment pursuant to rule 23 of the 

14 Federal Rules of Civil Procedure or a comparable 

15 rule or provision of State law. 

16 (4) COMMERCE.—The term ‘‘commerce’’ has 

17 the meaning given the term in section 3 of the Fair 

18 Labor Standards Act of 1938 (29 U.S.C. 203). 

19 (5) EMPLOY; EMPLOYEE; EMPLOYER.—The 

20 terms ‘‘employ’’, ‘‘employee’’, and ‘‘employer’’ have 

21 the meanings given such terms in section 3 of such 

22 Act (29 U.S.C. 203). 

23 (6) NONCOMPETE AGREEMENT.—The term 

24 ‘‘noncompete agreement’’ means an agreement, en25 tered into after the date of enactment of this Act beVerDate Sep 11 2014 00:10 Feb 22, 2023 Jkt 039200 PO 00000 Frm 00014 Fmt 6652 Sfmt 6201 E:\BILLS\H731.IH H731

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1 tween a person and an individual performing work 

2 for the person, that restricts such individual, after 

3 the working relationship between the person and in4 dividual terminates, from performing— 

5 (A) any work for another person for a 

6 specified period of time; 

7 (B) any work in a specified geographical 

8 area; or 

9 (C) any work for another person that is 

10 similar to such individual’s work for the person 

11 that is a party to such agreement. 

12 (7) OWNER OF A BUSINESS ENTITY.—The term 

13 ‘‘owner of a business entity’’ means— 

14 (A) in the case of a business entity that is 

15 a partnership (including a limited partnership 

16 or a limited liability partnership), any partner; 

17 (B) in the case of a business entity that is 

18 a limited liability company (including a series of 

19 a limited liability company formed under the 

20 laws of a jurisdiction that recognizes such a se21 ries), any member of such company; or 

22 (C) in the case of a business entity that is 

23 a corporation, a capital stockholder of the busi24 ness entity who owns not less than 5 percent of 

25 the capital stock. 


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1 (8) OWNERSHIP INTEREST.—The term ‘‘owner2 ship interest’’ means— 

3 (A) in the case of a business entity that is 

4 a partnership (including a limited partnership 

5 or a limited liability partnership), a partnership 

6 interest; 

7 (B) in the case of a business entity that is 

8 a limited liability company (including a series of 

9 a limited liability company formed under the 

10 laws of a jurisdiction that recognizes such a se11 ries), a membership interest; or 

12 (C) in the case of a business entity that is 

13 a corporation, not less than 5 percent of the 

14 capital stock of the business entity or, as appli15 cable, a subsidiary of the business entity. 

16 (9) PERSON.—The term ‘‘person’’ has the 

17 meaning given the term in section 3 of the Fair 

18 Labor Standards Act of 1938 (29 U.S.C. 203). 

19 (10) PREDISPUTE ARBITRATION AGREEMENT.— 

20 The term ‘‘predispute arbitration agreement’’ means 

21 an agreement to arbitrate a dispute that has not yet 

22 arisen at the time of the making of the agreement. 

23 (11) PREDISPUTE JOINT-ACTION WAIVER.—The 

24 term ‘‘predispute joint-action waiver’’ means an 

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1 tration agreement, that would prohibit, or waive the 

2 right of, one of the parties to the agreement to par3 ticipate in a joint, class, or collective action in a ju4 dicial, arbitral, administrative, or other forum, con5 cerning a dispute that has not yet arisen at the time 

6 of the making of the agreement. 

7 (12) QUALIFIED ASSET OR INTEREST.—The 

8 term ‘‘qualified asset or interest’’, with respect to a 

9 business entity, means an asset or interest that is— 

10 (A) all or substantially all of the operating 

11 assets and the goodwill of the business entity; 

12 (B) all or substantially all of the operating 

13 assets of a division, or a subsidiary, of the busi14 ness entity and the goodwill of that division or 

15 subsidiary; or 

16 (C) all of the ownership interest of any 

17 subsidiary of the business entity. 

18 (13) SALE.—The term ‘‘sale’’, with respect to a 

19 business entity, means the sale of the goodwill of the 

20 business entity, the sale or other disposal of all of 

21 the ownership interest of a seller in the business en22 tity, or the sale of a qualified asset or interest with 

23 regard to the business entity. 

24 (14) SELLER.—The term ‘‘seller’’, with respect 

25 to a business entity, means any person who sells the 


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1 goodwill of the business entity, any owner of the 

2 business entity selling or otherwise disposing of all 

3 of his or her ownership interest in the business enti4 ty, or any owner of the business entity that sells a 

5 qualified asset or interest with regard to the busi6 ness entity. 

7 (15) SENIOR EXECUTIVE OFFICIAL.—The term 

8 ‘‘senior executive official’’, with respect to a sale, 

9 means an official who was acquired as an employee 

10 of the buyer in such sale through the terms and con11 ditions of the sale, and, on the day before the date 

12 of such sale— 

13 (A) who was employed by the seller in such 

14 sale; 

15 (B) who was responsible for making or di16 recting major decisions of the seller; and 

17 (C) whose rate of compensation was in the 

18 highest 10 percent of the compensation rates 

19 for all employees of the seller. 

20 (16) TRADE SECRET.—The term ‘‘trade secret’’ 

21 has the meaning given the term in section 1839 of 

22 title 18, United States Code. 

Æ 


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