Workforce Mobility Act of 2025
The Workforce Mobility Act of 2025 would substantially restrict the use of noncompete agreements across most workers, aiming to boost labor mobility, wages, and overall productivity. With very narrow exceptions, it would prohibit entering into or enforcing noncompete agreements for individuals working for or under contract with a business, across activities in commerce. The bill creates a broad enforcement framework led by the Federal Trade Commission and the Department of Labor, allows individuals to sue for damages, and permits states to act on behalf of their residents. It also requires employers to post notices about the ban and supports a public awareness effort. Importantly, the bill preserves trade secret protections and disallows predispute arbitration or class-action waivers for alleged violations. In short, if enacted, the bill would largely end noncompete restraints, while allowing limited, specific forms of post-employment restraints tied to the sale of a business or certain executive severance arrangements, and it would establish a shared, multi-agency enforcement regime with private and state remedies to safeguard worker mobility.
Key Points
- 1Prohibition and scope: Generally bans entering into or enforcing noncompete agreements with workers or contractors; such agreements would have no force or effect unless they fall under narrowly defined exceptions.
- 2Narrow exceptions:
- 3- Sale of goodwill or ownership interest in a business (with geographic scope aligned to the business operations).
- 4- Senior executive severance arrangements (time-limited to no more than one year, in connection with a sale and under specified conditions).
- 5- Partnership dissolution or dissociation agreements (restricted to geographic areas where the partnership did business prior to the agreement).
- 6Enforcement and remedies:
- 7- Federal Trade Commission enforces sections related to noncompetes and notices; violations treated as unfair or deceptive acts.
- 8- Department of Labor can investigate and, if appropriate, sue in court for relief on behalf of aggrieved individuals, with a four-year statute of limitations.
- 9- Private right of action for individuals; possible damages, plus legal costs and attorney’s fees; state attorneys general may also sue on behalf of residents.
- 10- No predispute arbitration agreements or predispute joint-action waivers may be used to limit claims related to noncompetes.
- 11Notice and public awareness: Employers must post notices about the Act’s provisions where employees or applicants can see them; the Secretary of Labor may run a public awareness campaign.
- 12Trade secrets preserved: The bill explicitly allows nondisclosure of trade secrets and does not preclude such protections, even as noncompetes are banned.
- 13Reporting and coordination: The FTC and the Secretary of Labor must coordinate enforcement standards and report back to Congress about enforcement actions.