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Bipartisan Group of Senators Pose Another Challenge to Use of Noncompete Agreements

By now you are no doubt aware that last month the Federal Trade Commission proposed a new rule prohibiting employers from enforcing noncompete agreements against their workers. The FTC has received over 5,300 comments on the proposed rule in the past three weeks. On Wednesday a bipartisan group of U.S. Senators reintroduced the Workforce Mobility Act, which would also limit the use of non-compete agreements.

Generally, the WMA would: 

  • Narrow the use of non-compete agreements to include only instances of a dissolution of a partnership or the sale of a business;
  • Require employers to make their employees aware of the limitation on non-competes; and
  • Require the Federal Trade Commission and the Department of Labor to submit a report to Congress on any enforcement actions taken.

The WMA creates a private cause of action that would allow victims of an illegal noncompete to recover their actual damages and attorney’s fees and costs. Pre-dispute arbitration agreements and waivers of joint/collective actions would not be enforceable in the context of a claim under the WMA. The FTC’s proposed rule does not create a private cause of action.

Unlike the FTC’s proposed rule, the WMA would not impact in-place non-compete agreements. Meaning that if you implement a non-compete agreement before the WMA becomes law, if it does so, your non-compete will remain effective, so long as the FTC’s proposed rule does not also become law.  

Bipartisan Group of Senators Pose Another Challenge to Use of Noncompete Agreements

By now you are no doubt aware that last month the Federal Trade Commission proposed a new rule prohibiting employers from enforcing noncompete agreements against their workers. The FTC has received over 5,300 comments on the proposed rule in the past three weeks. On Wednesday a bipartisan group of U.S. Senators reintroduced the Workforce Mobility Act, which would also limit the use of non-compete agreements.

Generally, the WMA would: 

  • Narrow the use of non-compete agreements to include only instances of a dissolution of a partnership or the sale of a business;
  • Require employers to make their employees aware of the limitation on non-competes; and
  • Require the Federal Trade Commission and the Department of Labor to submit a report to Congress on any enforcement actions taken.

The WMA creates a private cause of action that would allow victims of an illegal noncompete to recover their actual damages and attorney’s fees and costs. Pre-dispute arbitration agreements and waivers of joint/collective actions would not be enforceable in the context of a claim under the WMA. The FTC’s proposed rule does not create a private cause of action.

Unlike the FTC’s proposed rule, the WMA would not impact in-place non-compete agreements. Meaning that if you implement a non-compete agreement before the WMA becomes law, if it does so, your non-compete will remain effective, so long as the FTC’s proposed rule does not also become law.  

Bipartisan Group of Senators Pose Another Challenge to Use of Noncompete Agreements

By now you are no doubt aware that last month the Federal Trade Commission proposed a new rule prohibiting employers from enforcing noncompete agreements against their workers. The FTC has received over 5,300 comments on the proposed rule in the past three weeks. On Wednesday a bipartisan group of U.S. Senators reintroduced the Workforce Mobility Act, which would also limit the use of non-compete agreements.

Generally, the WMA would: 

  • Narrow the use of non-compete agreements to include only instances of a dissolution of a partnership or the sale of a business;
  • Require employers to make their employees aware of the limitation on non-competes; and
  • Require the Federal Trade Commission and the Department of Labor to submit a report to Congress on any enforcement actions taken.

The WMA creates a private cause of action that would allow victims of an illegal noncompete to recover their actual damages and attorney’s fees and costs. Pre-dispute arbitration agreements and waivers of joint/collective actions would not be enforceable in the context of a claim under the WMA. The FTC’s proposed rule does not create a private cause of action.

Unlike the FTC’s proposed rule, the WMA would not impact in-place non-compete agreements. Meaning that if you implement a non-compete agreement before the WMA becomes law, if it does so, your non-compete will remain effective, so long as the FTC’s proposed rule does not also become law.  

Bipartisan Group of Senators Pose Another Challenge to Use of Noncompete Agreements

By now you are no doubt aware that last month the Federal Trade Commission proposed a new rule prohibiting employers from enforcing noncompete agreements against their workers. The FTC has received over 5,300 comments on the proposed rule in the past three weeks. On Wednesday a bipartisan group of U.S. Senators reintroduced the Workforce Mobility Act, which would also limit the use of non-compete agreements.

Generally, the WMA would: 

  • Narrow the use of non-compete agreements to include only instances of a dissolution of a partnership or the sale of a business;
  • Require employers to make their employees aware of the limitation on non-competes; and
  • Require the Federal Trade Commission and the Department of Labor to submit a report to Congress on any enforcement actions taken.

The WMA creates a private cause of action that would allow victims of an illegal noncompete to recover their actual damages and attorney’s fees and costs. Pre-dispute arbitration agreements and waivers of joint/collective actions would not be enforceable in the context of a claim under the WMA. The FTC’s proposed rule does not create a private cause of action.

Unlike the FTC’s proposed rule, the WMA would not impact in-place non-compete agreements. Meaning that if you implement a non-compete agreement before the WMA becomes law, if it does so, your non-compete will remain effective, so long as the FTC’s proposed rule does not also become law.  

Bipartisan Group of Senators Pose Another Challenge to Use of Noncompete Agreements

By now you are no doubt aware that last month the Federal Trade Commission proposed a new rule prohibiting employers from enforcing noncompete agreements against their workers. The FTC has received over 5,300 comments on the proposed rule in the past three weeks. On Wednesday a bipartisan group of U.S. Senators reintroduced the Workforce Mobility Act, which would also limit the use of non-compete agreements.

Generally, the WMA would: 

  • Narrow the use of non-compete agreements to include only instances of a dissolution of a partnership or the sale of a business;
  • Require employers to make their employees aware of the limitation on non-competes; and
  • Require the Federal Trade Commission and the Department of Labor to submit a report to Congress on any enforcement actions taken.

The WMA creates a private cause of action that would allow victims of an illegal noncompete to recover their actual damages and attorney’s fees and costs. Pre-dispute arbitration agreements and waivers of joint/collective actions would not be enforceable in the context of a claim under the WMA. The FTC’s proposed rule does not create a private cause of action.

Unlike the FTC’s proposed rule, the WMA would not impact in-place non-compete agreements. Meaning that if you implement a non-compete agreement before the WMA becomes law, if it does so, your non-compete will remain effective, so long as the FTC’s proposed rule does not also become law.  

Bipartisan Group of Senators Pose Another Challenge to Use of Noncompete Agreements

By now you are no doubt aware that last month the Federal Trade Commission proposed a new rule prohibiting employers from enforcing noncompete agreements against their workers. The FTC has received over 5,300 comments on the proposed rule in the past three weeks. On Wednesday a bipartisan group of U.S. Senators reintroduced the Workforce Mobility Act, which would also limit the use of non-compete agreements.

Generally, the WMA would: 

  • Narrow the use of non-compete agreements to include only instances of a dissolution of a partnership or the sale of a business;
  • Require employers to make their employees aware of the limitation on non-competes; and
  • Require the Federal Trade Commission and the Department of Labor to submit a report to Congress on any enforcement actions taken.

The WMA creates a private cause of action that would allow victims of an illegal noncompete to recover their actual damages and attorney’s fees and costs. Pre-dispute arbitration agreements and waivers of joint/collective actions would not be enforceable in the context of a claim under the WMA. The FTC’s proposed rule does not create a private cause of action.

Unlike the FTC’s proposed rule, the WMA would not impact in-place non-compete agreements. Meaning that if you implement a non-compete agreement before the WMA becomes law, if it does so, your non-compete will remain effective, so long as the FTC’s proposed rule does not also become law.