I 
117TH CONGRESS 
1ST SESSION H. R. 1367 
To prohibit certain noncompete agreements, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 25, 2021 
Mr. PETERS (for himself, Mr. GALLAGHER, Ms. ESHOO, and Mr. MEIJER) in-
troduced the following bill; which was referred to the Committee on En-
ergy and Commerce, and in addition to the Committee on Education and 
Labor, for a period to be subsequently determined by the Speaker, in 
each case for consideration of such provisions as fall within the jurisdic-
tion 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 2021’’. 
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 Congress’s commitment 
to fostering stronger wage growth for workers in the 
United States. Economists now estimate that 1 in 5 
workers is covered by a noncompete agreement. 
(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 where they have honed their 
skills altogether. 
(3) Enforceable noncompete agreements also re-
duce wages, restrict worker mobility, impinge on 
worker freedoms to maximize their labor market po-
tential, and slow the pace of American innovation. 
(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 workers’ labor 
market prospects. 
(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 
the work relationship have adequate legal protection 
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through the use of trade secrets protections and 
nondisclosure 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 
threaten to enforce a noncompete agreement with 
any individual who performs work for the person 
and who in any workweek is engaged in commerce 
or in the production of goods for commerce (or is 
employed in an enterprise engaged in commerce or 
in the production of goods for commerce). 
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(2) EFFECT OF AGREEMENTS.—Except as pro-
vided in subsection (b), a noncompete agreement de-
scribed in paragraph (1) shall have no force or ef-
fect. 
(b) EXCEPTIONS.— 
(1) SALE OF GOODWILL OR OWNERSHIP INTER-
EST.— 
(A) IN GENERAL.—Any person who sells 
the goodwill of a business, any owner of a busi-
ness entity selling or otherwise disposing of all 
of his or her ownership interest in the business 
entity, or any owner of a business entity that 
sells an asset or interest as described in sub-
paragraph (B), may enter into an agreement 
with the buyer to refrain from carrying on a 
like business within a specified geographic area 
described in subparagraph (C), if the buyer, or 
any person deriving title to the goodwill or own-
ership interest from the buyer, carries on a like 
business in such specified geographic area. 
(B) ASSET OR INTEREST.—An asset or in-
terest described in this subparagraph is— 
(i) all or substantially all of the oper-
ating assets and the goodwill of the busi-
ness entity; 
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(ii) all or substantially all of the oper-
ating assets of a division, or a subsidiary, 
of the business entity and the goodwill of 
that division or subsidiary; or 
(iii) all of the ownership interest of 
any subsidiary of the business entity. 
(C) SPECIFIED
GEOGRAPHIC
AREA.—A 
specified geographic area described in this sub-
paragraph is a geographic area specified in the 
agreement described in subparagraph (A), or 
(D) as applicable, where the business, business 
entity, division, or subsidiary sold as the subject 
of such agreement, has conducted business 
prior to the agreement. 
(D) SENIOR EXECUTIVE OFFICIALS WITH 
SEVERANCE AGREEMENTS.— 
(i) IN GENERAL.—Any buyer or seller 
described in subparagraph (A) may enter 
into an agreement with a senior executive 
official who has a severance agreement de-
scribed in clause (iii) for the senior execu-
tive official to refrain from carrying on a 
like business within a specified geographic 
area described in subparagraph (C), if the 
buyer, or any person deriving title to the 
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goodwill or ownership interest from the 
buyer, carries on a like business in such 
specified geographic area. 
(ii) TIME-LIMITED AGREEMENT.—An 
agreement described in clause (i) may not 
require the senior executive official to re-
frain from carrying on a like business as 
described in such clause for a period that 
is greater than one year. 
(iii) 
SEVERANCE
AGREEMENT.—A 
severance agreement described in this 
clause is an agreement between the buyer 
and the senior executive official, or an 
agreement between the seller and the sen-
ior executive official, described in clause (i) 
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 greater than 
or equal to the compensation the offi-
cial is reasonably expected to receive 
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from the buyer during the 1-year pe-
riod following the sale. 
(E) DEFINITIONS.— 
(i) BUYER, SALE, SELLER.—For pur-
poses of this paragraph— 
(I) the term ‘‘buyer’’ means, as 
described in subparagraph (A), any 
person who buys the goodwill of a 
business, buys or otherwise acquires 
ownership interest in a business enti-
ty, or buys an asset or interest as de-
scribed in subparagraph (B); 
(II) the term ‘‘sale’’ means, as 
described in subparagraph (A), the 
sale of the goodwill of a business, the 
sale or other disposal of all of the 
ownership interest of the seller in a 
business entity, or the sale of an asset 
or interest as described in subpara-
graph (B); and 
(III) the term ‘‘seller’’ means, as 
described in subparagraph (A), any 
person who sells the goodwill of a 
business, any owner of a business en-
tity selling or otherwise disposing of 
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all of his or her ownership interest in 
the business entity, or any owner of a 
business entity that sells an asset or 
interest as described in subparagraph 
(B). 
(ii) SENIOR EXECUTIVE OFFICIAL.— 
For purposes of subparagraph (D), the 
term ‘‘senior executive official’’ means an 
official who was acquired as an employee 
of the buyer through the terms and condi-
tions of the sale, and, on the day before 
the date of such sale— 
(I) who was employed by the sell-
er; 
(II) who had an integral role in 
the senior executive management team 
of the seller; 
(III) who was responsible for 
making or directing major decisions of 
the seller; and 
(IV) whose rate of compensation 
was in the highest 10 percent of the 
compensation rates for all employees 
of the seller. 
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(2) PARTNERSHIP
DISSOLUTION
OR
DISASSO-
CIATION.— 
(A) IN GENERAL.—Any partner may, upon 
or in anticipation of any circumstance described 
in subparagraph (B), enter into an agreement 
with any other member of the partnership that 
the partner will not carry on a like business 
within a specified geographic area described in 
subparagraph (C), if any other member of the 
partnership, or any person deriving title to the 
business or the goodwill of the business from 
any other member of the partnership, carries on 
a like business in such specified geographic 
area. 
(B) CIRCUMSTANCES.—A circumstance de-
scribed in this subparagraph is either of the fol-
lowing: 
(i) A dissolution of the partnership. 
(ii) Dissociation of the partner from 
the partnership. 
(C) SPECIFIED
GEOGRAPHIC
AREA.—A 
specified geographic area described in this sub-
paragraph is a geographic area specified in the 
agreement described in subparagraph (A) where 
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any business of the partnership has been trans-
acted 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 working for 
the person to not share any information (including after 
the individual is no longer working for the person) regard-
ing the person, or the work performed by the individual 
for the person, that is a trade secret. 
SEC. 5. NOTICE; PUBLIC AWARENESS CAMPAIGN. 
(a) NOTICE.—Any person who engages an individual 
who performs work for the person in commerce or in the 
production of goods for commerce (or employs an indi-
vidual in an enterprise engaged in commerce or in the pro-
duction of goods for commerce) shall post notice of the 
provisions of this Act in a conspicuous place on the prem-
ises of such person. 
(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 
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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 
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.). 
(b) DEPARTMENT OF LABOR.— 
(1) IN GENERAL.—The Secretary of Labor— 
(A) shall receive and investigate a com-
plaint of a violation of section 3 or 5(a), if the 
person in violation of such section is an em-
ployer of one or more employees; and 
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(B) may bring an action in any court of 
competent jurisdiction to obtain the legal or eq-
uitable relief against the person described in 
subparagraph (A) on behalf of an individual ag-
grieved by the violation as may be appropriate 
to effectuate the purposes of such sections, sub-
ject to paragraph (2). 
(2) CIVIL
FINES.—In an action described in 
paragraph (1)(B), the court of competent jurisdic-
tion described in such paragraph shall impose a civil 
fine on any person described in paragraph (1)(A) 
who violates section 3 or 5(a), in an amount not to 
exceed $5,000 for each week the person is in such 
violation. Such fine shall be paid to the individual 
aggrieved by such violation. 
(3) REGULATIONS.—Not later than 180 days 
after the date of enactment of this Act, the Sec-
retary of Labor shall issue regulations with respect 
to the authority of the Secretary in enforcing viola-
tions of section 3 or 5(a) in accordance with this 
subsection. 
(c) STANDARDS
FOR DUAL ENFORCEMENT.—Not 
later than 90 days 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— 
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(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) 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 to 
enforce any liability under this subsection, the 
costs of the action and reasonable attorney’s 
fees, as determined by the court. 
SEC. 7. REPORTS. 
Not later than 1 year after the date on which the 
Secretary of Labor issues the regulations under section 
6(b)(3), the Federal Trade Commission and the Secretary 
of Labor shall each submit to Congress a report on any 
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actions taken by the Commission or Secretary, respec-
tively, 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 
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) COMMERCE; ENTERPRISE ENGAGED IN COM-
MERCE
OR
IN
THE
PRODUCTION
OF
GOODS
FOR 
COMMERCE; PERSON; STATE.—The terms ‘‘com-
merce’’, ‘‘enterprise engaged in commerce or in the 
production of goods for commerce’’, ‘‘person’’, and 
‘‘State’’ have the meanings given the terms in sec-
tion 3 of the Fair Labor Standards Act of 1938 (29 
U.S.C. 203). 
(3) EMPLOYEE; EMPLOYER.—The terms ‘‘em-
ployee’’ and ‘‘employer’’ have the meanings given 
such terms in section 3 of the Fair Labor Standards 
Act of 1938 (29 U.S.C. 203). 
(4) 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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tween 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 fol-
lowing: 
(A) Any work for another person for a 
specified period of time. 
(B) Any work in a specified geographical 
area. 
(C) Any work for another person that is 
similar to such individual’s work for the person 
that is a party to such agreement. 
(5) OWNER OF A BUSINESS ENTITY.—The term 
‘‘owner of a business entity’’ means— 
(A) in the case of a business entity that is 
a partnership (including a limited partnership 
or a limited liability partnership), any partner; 
(B) in the case of a business entity that is 
a limited liability company (including a series of 
a limited liability company formed under the 
laws of a jurisdiction that recognizes such a se-
ries), any member of such company; or 
(C) in the case of a business entity that is 
a corporation, any owner of capital stock. 
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