Continuing a crackdown on noncompetes at the federal level, a new bill introduced in the House of Representatives would ban noncompete agreements nationwide for nonexempt employees under the Fair Labor Standards Act (FLSA).
The Restoring Workers’ Rights Act, introduced by Rep. Mike Garcia (R-Calif.), would amend the FLSA to prohibit noncompete agreements that “restrict such employee[s] from performing, after the employment relationship between the employer and employee terminates, any of the following:
H.R. 8755 would also void any noncompete agreement entered into before its date of enactment and prevent employers from enforcing, or threatening to enforce, any noncompete agreements with employees.
The proposed law would not impact agreements between employers and employees to protect trade secrets, however, including after the employee is no longer employed by the employer.
The measure, which has related legislation in the Senate—the Freedom to Compete Act, or S. 2375—was referred to the House Education and Labor Committee.
According to Rep. Garcia, the bill “will foster economic competition and level the playing field for workers, resulting in better opportunities and higher wages by banning noncompete agreements for lower to middle income...
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