WASHINGTON – U.S. Senators Chris Murphy (D-Conn.), Elizabeth Warren (D-Mass.), and Ron Wyden (D-Ore.) introduced the Workforce Mobility Act on Thursday to allow workers to pursue new jobs and higher wages without fearing legal action from their former employers. The new legislation would prohibit the use of non-compete agreements, while still allowing employers to protect their trade secrets. The bill would also require employers to notify employees that these agreements are illegal, and allow the U.S. Department of Labor to enforce the ban with fines on the employer.
Non-compete agreements result in lower wages and diminished entrepreneurship as workers have little leverage to negotiate with their employer, leave for a better opportunity, or start a small business. Research shows that nearly 40 percent of American workers have been constrained by non-compete agreements at some point in their careers, and that they are common even among low-wage workers. Many believe that California’s ban on non-compete agreements has been a prime factor in the state’s innovative and growing economy.
“Too many companies try to hide arbitrary non-compete agreements in contracts. This rigged system does nothing but hurt workers and stifle growth. People in Connecticut want to be able to change jobs and get better wages. Whether you’re a fast food worker or a tech entrepreneur, no worker should unfairly be at the mercy of their employers,” said Murphy.
“Non-competes rig the system against hard working people,” said Warren. “These clauses reduce worker bargaining power, stifle competition and innovation, and hurt Americans striving for better opportunities. I’m glad to join Senator Murphy to put an end to these anti-worker, anti-market agreements.”
“In order to climb up the economic ladder, workers need to be able to seek higher wages either from their current employer or a new one. Yet that’s exactly what companies are preventing by forcing employees to sign non-compete clauses to get a job in the first place,” Wyden said. “It’s time to put the power back into the hands of working Americans and free them up to go after higher-paying jobs using the experience they’ve gained, rather than allow companies to keep workers stuck in jobs that are no longer providing a competitive wage.”
Murphy previously introduced the Mobility and Opportunity for Vulnerable Employees (MOVE) Act, which would ban the use of non-compete agreements for employees making less than $15 an hour, $31,200 per year, or the minimum wage in the employee’s municipality, and would require employers to notify prospective employees that they may be asked to sign a non-compete agreement.