Workforce Mobility Act of 2026
Sponsored By: Representative Peters, Scott H. [D-CA-50]
Introduced
Summary
A federal ban on most noncompete agreements would bar employers from entering into or enforcing clauses that stop employees or contractors from working in or affecting commerce. The bill would allow narrow exceptions tied to business sales, limited senior executive deals, and partner dissolution, and it preserves nondisclosure agreements that protect trade secrets.
Show full summary
- Most employees and contract workers would be free to change jobs or start businesses without being blocked by noncompete clauses.
- Buyers and sellers could still agree to limited geographic noncompete terms when a whole business, division, or subsidiary is sold. Senior executives could accept a one year restriction only if it is part of the sale and they receive severance at least equal to what they would reasonably expect to earn during that year.
- Employers would have to post notice about the law and the Secretary of Labor could run public awareness activities. The Federal Trade Commission and the Department of Labor would share enforcement duties, individuals could sue in federal court, state attorneys general could bring parens patriae actions, predispute arbitration waivers would be voided, and a four year statute of limitations would apply.
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Bill Overview
Analyzed Economic Effects
9 provisions identified: 6 benefits, 0 costs, 3 mixed.
Arbitration ban for noncompete claims
If enacted, any predispute arbitration agreement or predispute waiver of joint, class, or collective actions would be void for alleged violations of the noncompete ban or the posting rule. Workers would be able to bring such claims to court rather than being forced into arbitration.
Ban on most noncompete contracts
If enacted, the bill would make most new noncompete agreements entered into after enactment unenforceable for employees and contractors in or affecting commerce. Employers and others would not be able to enter into, try to enforce, or rely on those post‑enactment noncompetes. The ban would still allow a few narrow exceptions listed elsewhere in the bill.
Workers can sue for damages
If enacted, an individual harmed by a violation could bring a civil action in federal court. A court could award actual damages and, if the plaintiff wins, costs and reasonable attorney's fees as the court determines.
FTC and Labor enforcement steps
If enacted, violations of the noncompete ban and the posting rule would be treated as unfair practices under the FTC Act and enforceable by the FTC with its usual powers. The Secretary of Labor would investigate violations, may sue on behalf of aggrieved people, and must issue regulations within 18 months. The FTC and Labor must set shared enforcement standards within one year and keep complaint intake systems with confidentiality protections. State attorneys general could also bring parens patriae suits for residents.
Who counts as owner or executive
If enacted, the bill would define key terms used by the ban. 'Owner' includes partners, LLC members, and corporate holders of not less than 5% of capital stock. 'Noncompete agreement' covers post‑enactment limits on time, place, or scope of work. 'Senior executive official' means a seller employee in the top 10% of pay who directed major decisions and was employed the day before a sale.
Employers must post worker notice
If enacted, employers who engage employees or contractors in or affecting commerce would have to post a conspicuous notice of the Act where worker notices are customarily posted, physically or electronically. The Secretary of Labor could run public awareness activities about the law.
Partner noncompetes on dissolution
If enacted, partners could agree that when a partnership dissolves or a partner dissociates, the departing partner will not run a similar business in a specified geographic area. The area must be written in the agreement and must be an area where the partnership did business before the agreement.
Noncompetes in business sales
If enacted, sellers could agree not to run a similar business in a specified geographic area as part of a sale, but only where the buyer (or its successor) operates the business there. The bill would also allow a buyer or seller to impose a one‑year noncompete on a senior executive acquired in a sale only if the restriction is part of the sale and comes with severance pay at least equal to the executive's reasonable expected pay for that year. The senior‑executive restriction must be written and limited to one year.
Trade-secret nondisclosure agreements allowed
If enacted, the bill would not stop agreements that bar disclosure of trade secrets as defined in 18 U.S.C. 1839. Nondisclosure obligations that protect qualifying trade secrets could remain enforceable and could survive the end of employment or a contract.
Sponsors & CoSponsors
Sponsor
Peters, Scott H. [D-CA-50]
CA • D
Cosponsors
Rep. Kean, Thomas H. [R-NJ-7]
NJ • R
Sponsored 9/1/2026
Roll Call Votes
No roll call votes available for this bill.
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