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 Com-
merce, and in addition to the Committee on Education and the Work-
force, 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. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Workforce Mobility 
Act of 2023’’. 
SEC. 2. FINDINGS. 
Congress finds the following: 
(1) The proliferation of noncompete agreements 
throughout sectors, occupational categories, and in-
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come brackets is contrary to the commitment of 
Congress to foster stronger wage growth for workers 
in the United States. Economists now estimate that 
1 in 5 workers is covered by a noncompete agree-
ment. 
(2) Noncompete agreements are blunt instru-
ments that crudely protect employer interests and 
place a drag on national productivity by forcing cov-
ered workers to either idle for long periods of time 
or leave the industries in which the workers have 
honed their skills altogether. 
(3) Enforceable noncompete agreements also re-
duce wages, restrict worker mobility, impinge on the 
freedom of a worker to maximize labor market po-
tential, and slow the pace of innovation in the 
United States. 
(4) Employers have access to legal recourses to 
protect their legitimate interests and property, in-
cluding trade secret protections, intellectual property 
protections, and nondisclosure agreements that do 
not inflict broad collateral harm on the labor market 
prospects for workers. 
(5) Employers that rely on a list or lists of ven-
dors, customers, or clients that are not easily ob-
tained by an individual through means other than 
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the work relationship have adequate legal protection 
through the use of trade secret protections and non-
disclosure agreements. 
(6) Noncompete agreements broadly restrict 
employment options for workers in the United States 
when more narrowly targeted remedies are readily 
available to employers. 
(7) Fostering an environment where employers 
can flourish is necessary to promote vitality and 
prosperity in the economy. 
(8) Employers may retain critical skilled em-
ployees while ensuring that disincentives affecting 
mobility, including noncompete agreements, do not 
negatively impact the workforce in the United 
States. 
SEC. 3. PROHIBITING NONCOMPETE AGREEMENTS. 
(a) PROHIBITION.— 
(1) IN GENERAL.—Except as provided in sub-
section (b), no person shall enter into, enforce, or at-
tempt to enforce a noncompete agreement with any 
individual who is employed by, or performs work 
under contract with, such person with respect to the 
activities of such person in or affecting commerce. 
(2) EFFECT OF AGREEMENTS.—Except as pro-
vided in subsection (b), a noncompete agreement de-
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scribed in paragraph (1) shall have no force or ef-
fect. 
(b) EXCEPTIONS.— 
(1) SALE OF GOODWILL OR OWNERSHIP INTER-
EST.— 
(A) IN GENERAL.—A seller of a business 
entity may enter into an agreement with the 
buyer to refrain from carrying on a like busi-
ness within a specified geographic area de-
scribed in subparagraph (C), if the buyer, or 
any person deriving title to the goodwill of the 
business entity or an ownership interest in the 
business entity from the buyer, carries on a like 
business in such specified geographic area. 
(B) SENIOR EXECUTIVE OFFICIALS WITH 
SEVERANCE AGREEMENTS.— 
(i) IN
GENERAL.—Subject to clause 
(ii), a buyer or seller of a business entity 
may enter into a noncompete agreement 
with a senior executive official who has a 
severance agreement described in clause 
(iii) that restricts the senior executive offi-
cial from performing, within a specified ge-
ographic area described in subparagraph 
(C), any work that is similar to the work 
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that the senior executive official performed 
for the buyer or seller, if the buyer, or any 
person deriving title to the goodwill of the 
business entity or an ownership interest in 
the business entity from the buyer, carries 
on a like business in such specified geo-
graphic area. 
(ii) TIME-LIMITED
AGREEMENT.—A 
noncompete agreement described in clause 
(i) may not restrict the senior executive of-
ficial as described in such clause for a pe-
riod that is more than one year. 
(iii) 
SEVERANCE
AGREEMENT.—A 
severance agreement described in this 
clause is an agreement between the buyer 
or seller of a business entity and a senior 
executive official that— 
(I) is part of the terms and con-
ditions of the sale; and 
(II) requires monetary compensa-
tion for the senior executive official in 
the event of termination of the em-
ployment of the senior executive offi-
cial at an amount that is not less than 
the compensation that the senior exec-
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utive official is or would be reasonably 
expected to receive from the buyer 
during the 1-year period following the 
sale. 
(C) SPECIFIED
GEOGRAPHIC
AREA.—A 
specified geographic area described in this sub-
paragraph is a geographic area— 
(i) that is specified in an agreement 
described in subparagraph (A), or a non-
compete agreement described in subpara-
graph (B), regarding a business entity; 
and 
(ii) in which such business entity, in-
cluding any division or subsidiary of such 
business entity, conducted business prior 
to the agreement or noncompete agree-
ment. 
(2) PARTNERSHIP
DISSOLUTION
OR
DISASSO-
CIATION.— 
(A) IN GENERAL.—Any partner of a part-
nership may enter into an agreement with any 
other member of the partnership that, upon the 
dissolution of the partnership or dissociation of 
the partner from such partnership, the partner 
will refrain from carrying on a like business 
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within a specified geographic area described in 
subparagraph (B), if any other member of the 
partnership, or any person deriving title to the 
partnership or the goodwill of the partnership 
from any other member of the partnership, car-
ries on a like business in such specified geo-
graphic area. 
(B) SPECIFIED
GEOGRAPHIC
AREA.—A 
specified geographic area described in this sub-
paragraph is a geographic area— 
(i) that is specified in an agreement 
described in subparagraph (A); and 
(ii) in which any business of the part-
nership has been transacted prior to the 
agreement. 
SEC. 4. TRADE SECRETS. 
Nothing in this Act shall preclude a person from en-
tering into an agreement with an individual who is em-
ployed by, or performs work under contract with, such per-
son with respect to the activities of such person in or af-
fecting commerce to not disclose any information (includ-
ing after the individual is no longer employed or per-
forming work for the person) regarding the person, or the 
work performed by the individual for the person, that is 
a trade secret. 
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SEC. 5. NOTICE; PUBLIC AWARENESS CAMPAIGN. 
(a) NOTICE.—Any person who engages an individual 
who is employed by, or performs work under contract with, 
such person with respect to the activities of such person 
in or affecting commerce shall post and maintain notice 
of the provisions of this Act— 
(1) in a conspicuous place on the premises of 
such person; or 
(2) in a conspicuous place where notices to em-
ployees and applicants for employment are custom-
arily posted physically or electronically by such per-
son. 
(b) PUBLIC AWARENESS CAMPAIGN.—The Secretary 
of Labor may carry out activities to make the public aware 
of the provisions of this Act. 
SEC. 6. ENFORCEMENT. 
(a) FEDERAL TRADE COMMISSION.— 
(1) UNFAIR
OR
DECEPTIVE
ACTS
OR
PRAC-
TICES.—A violation of section 3 or 5(a) shall be 
treated as a violation of a rule defining an unfair or 
deceptive act or practice prescribed under section 
18(a)(1)(B) of the Federal Trade Commission Act 
(15 U.S.C. 57a(a)(1)(B)). 
(2) POWERS OF COMMISSION.— 
(A) IN
GENERAL.—The Federal Trade 
Commission shall enforce sections 3 and 5(a) in 
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the same manner, by the same means, and with 
the same jurisdiction, powers, and duties as 
though all applicable terms and provisions of 
the Federal Trade Commission Act (15 U.S.C. 
41 et seq.) were incorporated into and made a 
part of this Act. 
(B) PRIVILEGES
AND
IMMUNITIES.—Any 
person who violates section 3 or 5(a) shall be 
subject to the penalties and entitled to the 
privileges and immunities provided in the Fed-
eral Trade Commission Act (15 U.S.C. 41 et 
seq.). 
(C) AUTHORITY PRESERVED.—Nothing in 
this Act shall be construed to limit the author-
ity of the Federal Trade Commission under any 
other provision of law. 
(b) DEPARTMENT OF LABOR.— 
(1) IN GENERAL.—The Secretary of Labor— 
(A) shall investigate as the Secretary de-
termines necessary to determine violations of 
section 3 or 5(a) by an employer; and 
(B) may, subject to paragraph (2), bring 
an action in any court of competent jurisdiction 
to obtain the legal or equitable relief against an 
employer on behalf of an individual aggrieved 
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by the violation as may be appropriate to effec-
tuate the purposes of such sections. 
(2) STATUTE OF LIMITATIONS.—An action de-
scribed in paragraph (1)(B) may not be commenced 
later than 4 years after the date on which the viola-
tion occurred. 
(3) REGULATIONS.—Not later than 18 months 
after the date of enactment of this Act, the Sec-
retary of Labor, in consultation with the Chair of 
the Federal Trade Commission, shall issue regula-
tions as necessary to carry out this Act, including 
with respect to the authority of the Secretary of 
Labor to enforce violations of section 3 or 5(a) in 
accordance with paragraph (1). 
(c) STANDARDS
FOR DUAL ENFORCEMENT.—Not 
later than 1 year after the date of enactment of this Act, 
the Federal Trade Commission and the Secretary of Labor 
shall, for the purposes of enforcing this Act— 
(1) develop shared standards for consistent en-
forcement; and 
(2) identify the scope of responsibility of the 
Federal Trade Commission and such scope of the 
Secretary of Labor to ensure complementary en-
forcement of this Act. 
(d) REPORTING VIOLATIONS.— 
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(1) IN GENERAL.—The Federal Trade Commis-
sion and the Secretary of Labor shall each establish 
a system to receive complaints by individuals regard-
ing alleged violations of section 3. 
(2) CONFIDENTIALITY.—Except as otherwise 
required by law, the Federal Trade Commission and 
the Secretary of Labor may not disclose the identity 
or identifying information of any individual pro-
viding a complaint under paragraph (1), without ex-
plicit consent from the individual. 
(e) PRIVATE RIGHT OF ACTION.— 
(1) IN
GENERAL.—An individual who is ag-
grieved by a violation of this Act may bring a civil 
action in any appropriate district court of the 
United States. 
(2) RELIEF.—In a civil action under paragraph 
(1), a court may award— 
(A) any actual damages sustained by the 
individual as a result of the violation; and 
(B) in the case of any successful action, 
the costs of the action and reasonable attor-
ney’s fees, as determined by the court. 
(f) ENFORCEMENT BY STATES.— 
(1) IN GENERAL.—In any case in which the at-
torney general of a State has reason to believe that 
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an interest of the residents of the State has been or 
is threatened or adversely affected by any person 
who violates any provision of section 3 or 5(a) or 
any rule promulgated under this Act to carry out 
such section, the attorney general of the State, as 
parens patriae, may bring a civil action on behalf of 
the residents of the State in an appropriate State 
court or an appropriate district court of the United 
States to— 
(A) enjoin any further such violation by 
the person; 
(B) compel compliance with section 3 or 
5(a) or any such rule; 
(C) obtain a permanent, temporary, or pre-
liminary injunction; 
(D) obtain damages, restitution, or other 
compensation on behalf of the residents of the 
State; or 
(E) obtain any other appropriate equitable 
relief. 
(2) PRESERVATION OF STATE POWERS.—Noth-
ing in this subsection shall be construed as altering, 
limiting, or affecting the authority of the attorney 
general of a State to— 
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(A) bring an action or other regulatory 
proceeding arising solely under the laws in ef-
fect in that State; or 
(B) exercise the powers conferred on the 
attorney general by the laws of the State, in-
cluding the ability to conduct investigations, ad-
minister oaths or affirmations, or compel the 
attendance of witnesses or the production of 
documentary or other evidence. 
(g) ARBITRATION
AND CLASS ACTION.—Notwith-
standing any other provision of law, no predispute arbitra-
tion agreement or predispute joint-action waiver shall be 
valid or enforceable with respect to any alleged violation 
of section 3 or 5(a). 
SEC. 7. REPORTS. 
Not later than 1 year after the date on which the 
Secretary of Labor issues any regulations under section 
6(b)(3), the Federal Trade Commission and the Secretary 
of Labor shall each submit to Congress a report on any 
actions taken by the Federal Trade Commission or Sec-
retary, respectively, to enforce the provisions of this Act. 
SEC. 8. DEFINITIONS. 
For purposes of this Act: 
(1) BUSINESS
ENTITY.—The term ‘‘business 
entity’’ means any partnership (including a limited 
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partnership or a limited liability partnership), lim-
ited liability company (including a series of a limited 
liability company formed under the laws of a juris-
diction that recognizes such a series), or corporation. 
(2) BUYER.—The term ‘‘buyer’’, with respect to 
a business entity, means any person who buys the 
goodwill of the business entity, buys or otherwise ac-
quires ownership interest in the business entity, or 
buys a qualified asset or interest with regard to the 
business entity. 
(3) CLASS ACTION.—The term ‘‘class action’’ 
means a lawsuit in which 1 or more parties seek or 
obtain class treatment pursuant to rule 23 of the 
Federal Rules of Civil Procedure or a comparable 
rule or provision of State law. 
(4) COMMERCE.—The term ‘‘commerce’’ has 
the meaning given the term in section 3 of the Fair 
Labor Standards Act of 1938 (29 U.S.C. 203). 
(5) EMPLOY; 
EMPLOYEE; 
EMPLOYER.—The 
terms ‘‘employ’’, ‘‘employee’’, and ‘‘employer’’ have 
the meanings given such terms in section 3 of such 
Act (29 U.S.C. 203). 
(6) NONCOMPETE
AGREEMENT.—The term 
‘‘noncompete agreement’’ means an agreement, en-
tered into after the date of enactment of this Act be-
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goodwill of the business entity, any owner of the 
business entity selling or otherwise disposing of all 
of his or her ownership interest in the business enti-
ty, or any owner of the business entity that sells a 
qualified asset or interest with regard to the busi-
ness entity. 
(15) SENIOR EXECUTIVE OFFICIAL.—The term 
‘‘senior executive official’’, with respect to a sale, 
means an official who was acquired as an employee 
of the buyer in such sale through the terms and con-
ditions of the sale, and, on the day before the date 
of such sale— 
(A) who was employed by the seller in such 
sale; 
(B) who was responsible for making or di-
recting major decisions of the seller; and 
(C) whose rate of compensation was in the 
highest 10 percent of the compensation rates 
for all employees of the seller. 
(16) TRADE SECRET.—The term ‘‘trade secret’’ 
has the meaning given the term in section 1839 of 
title 18, United States Code. 
Æ 
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