,,ii #aahth ,,congress #ast ,session ,s4 #bbj ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,february #a1 #bjbc,mr4 ,murphy 7for himself1 ,mr4 ,young1 ,mr4 ,kaine1 and ,mr4 ,cramer7 introduced the following bill2 which was read twice and referred to the ,committee on ,health1 ,education1 ,labor1 and ,pensions ,a ,,bill ,to prohibit certain noncompete agreements1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,workforce ,mobility ,act of #bjbc4 #b4 ,findings ,congress finds the following3 7#a7 ,the proliferation of noncompete agreements throughout sectors1 occupational categories1 and income brackets is contrary to the commitment of ,congress to foster stronger wage growth for workers in the ,united ,states4 ,economists now estimate that #a in #e workers is covered by a noncompete agreement4 7#b7 ,noncompete agreements are blunt instruments that crudely protect employer interests and place a drag on national productivity by forcing covered workers to either idle for long periods of time or leave the industries in which the workers have honed their skills altogether4 7#c7 ,enforceable noncompete agreements also reduce wages1 restrict worker mobility1 impinge on the freedom of a worker to maximize labor market potential1 and slow the pace of innovation in the ,united ,states4 7#d7 ,employers have access to legal recourses to protect their legitimate interests and property1 including trade secret protections1 intellectual property protections1 and nondisclosure agreements that do not inflict broad collateral harm on the labor market prospects for workers4 7#e7 ,employers that rely on a list or lists of vendors1 customers1 or clients that are not easily obtained by an individual through means other than the work relationship have adequate legal protection through the use of trade secret protections and nondisclosure agreements4 7#f7 ,noncompete agreements broadly restrict employment options for workers in the ,united ,states when more narrowly targeted remedies are readily available to employers4 7#g7 ,fostering an environment where employers can flourish is necessary to promote vitality and prosperity in the economy4 7#h7 ,employers may retain critical skilled employees while ensuring that disincentives affecting mobility1 including noncompete agreements1 do not negatively impact the workforce in the ,united ,states4 #c4 ,prohibiting noncompete agreements 7a7 ,prohibition 7#a7 ,in general ,except as provided in subsection 7b71 no person shall enter into1 enforce1 or attempt to enforce a noncompete agreement with any individual who is employed by1 or performs work under contract with1 such person with respect to the activities of such person in or affecting commerce4 7#b7 ,effect of agreements ,except as provided in subsection 7b71 a noncompete agreement described in paragraph 7#a7 shall have no force or effect4 7b7 ,exceptions 7#a7 ,sale of goodwill or ownership interest 7,a7 ,in general ,a seller of a business entity may enter into an agreement with the buyer to refrain from carrying on a like business within a specified geographic area described in subparagraph 7,c71 if the buyer1 or any person deriving title to the goodwill of the business entity or an ownership interest in the business entity from the buyer1 carries on a like business in such specified geographic area4 7,b7 ,senior executive officials with severance agreements 7i7 ,in general ,subject to clause 7ii71 a buyer or seller of a business entity may enter into a noncompete agreement with a senior executive official who has a severance agreement described in clause 7iii7 that restricts the senior executive official from performing1 within a specified geographic area described in subparagraph 7,c71 any work that is similar to the work that the senior executive official performed for the buyer or seller1 if the buyer1 or any person deriving title to the goodwill of the business entity or an ownership interest in the business entity from the buyer1 carries on a like business in such specified geographic area4 7ii7 ,time-limited agreement ,a noncompete agreement described in clause 7i7 may not restrict the senior executive official as described in such clause for a period that is more than one year4 7iii7 ,severance agreement ,a severance agreement described in this clause is an agreement between the buyer or seller of a business entity and a senior executive official that-- 7,i7 is part of the terms and conditions of the sale2 and 7,,ii7 requires monetary compensation for the senior executive official in the event of termination of the employment of the senior executive official at an amount that is not less than the compensation that the senior executive official is or would be reasonably expected to receive from the buyer during the #a-year period following the sale4 7,c7 ,specified geographic area ,a specified geographic area described in this subparagraph is a geographic area-- 7i7 that is specified in an agreement described in subparagraph 7,a71 or a noncompete agreement described in subparagraph 7,b71 regarding a business entity2 and 7ii7 in which such business entity1 including any division or subsidiary of such business entity1 conducted business prior to the agreement or noncompete agreement4 7#b7 ,partnership dissolution or disassociation 7,a7 ,in general ,any partner of a partnership may enter into an agreement with any other member of the partnership that1 upon the dissolution of the partnership or dissociation of the partner from such partnership1 the partner will refrain from carrying on a like business within a specified geographic area described in subparagraph 7,b71 if any other member of the partnership1 or any person deriving title to the partnership or the goodwill of the partnership from any other member of the partnership1 carries on a like business in such specified geographic area4 7,b7 ,specified geographic area ,a specified geographic area described in this subparagraph is a geographic area-- 7i7 that is specified in an agreement described in subparagraph 7,a72 and 7ii7 in which any business of the partnership has been transacted prior to the agreement4 #d4 ,trade secrets ,nothing in this ,act shall preclude a person from entering into an agreement with an individual who is employed by1 or performs work under contract with1 such person with respect to the activities of such person in or affecting commerce to not disclose any information 7including after the individual is no longer employed or performing work for the person7 regarding the person1 or the work performed by the individual for the person1 that is a trade secret4 #e4 ,notice2 public awareness campaign 7a7 ,notice ,any person who engages an individual who is employed by1 or performs work under contract with1 such person with respect to the activities of such person in or affecting commerce shall post and maintain notice of the provisions of this ,act-- 7#a7 in a conspicuous place on the premises of such person2 or 7#b7 in a conspicuous place where notices to employees and applicants for employment are customarily posted physically or electronically by such person4 7b7 ,public awareness campaign ,the ,secretary of ,labor may carry out activities to make the public aware of the provisions of this ,act4 #f4 ,enforcement 7a7 ,federal ,trade ,commission 7#a7 ,unfair or deceptive acts or practices ,a violation of section #c or #e7;a7 shall be treated as a violation of a rule defining an unfair or deceptive act or practice prescribed under section #ah7;a77#a77;,b7 of the ,federal ,trade ,commission ,act 7#ae ,u4,s4,c4 #eg;a7a77#a77;,b774 7#b7 ,powers of ,commission 7,a7 ,in general ,the ,federal ,trade ,commission shall enforce sections #c and #e7;a7 in the same manner1 by the same means1 and with the same jurisdiction1 powers1 and duties as though all applicable terms and provisions of the ,federal ,trade ,commission ,act 7#ae ,u4,s4,c4 #da et seq47 were incorporated into and made a part of this ,act4 7,b7 ,privileges and immunities ,any person who violates section #c or #e7;a7 shall be subject to the penalties and entitled to the privileges and immunities provided in the ,federal ,trade ,commission ,act 7#ae ,u4,s4,c4 #da et seq474 7,c7 ,authority preserved ,nothing in this ,act shall be construed to limit the authority of the ,federal ,trade ,commission under any other provision of law4 7b7 ,department of ,labor 7#a7 ,in general ,the ,secretary of ,labor-- 7,a7 shall investigate as the ,secretary determines necessary to determine violations of section #c or #e7;a7 by an employer2 and 7,b7 may1 subject to paragraph 7#b71 bring an action in any court of competent jurisdiction to obtain the legal or equitable relief against an employer on behalf of an individual aggrieved by the violation as may be appropriate to effectuate the purposes of such sections4 7#b7 ,statute of limitations ,an action described in paragraph 7#a77;,b7 may not be commenced later than #d years after the date on which the violation occurred4 7#c7 ,regulations ,not later than #ah months after the date of enactment of this ,act1 the ,secretary of ,labor1 in consultation with the ,chair of the ,federal ,trade ,commission1 shall issue regulations as necessary to carry out this ,act1 including with respect to the authority of the ,secretary of ,labor to enforce violations of section #c or #e7;a7 in accordance with paragraph 7#a74 7c7 ,standards for dual enforcement ,not later than #a year after the date of enactment of this ,act1 the ,federal ,trade ,commission and the ,secretary of ,labor shall1 for the purposes of enforcing this ,act-- 7#a7 develop shared standards for consistent enforcement2 and 7#b7 identify the scope of responsibility of the ,federal ,trade ,commission and such scope of the ,secretary of ,labor to ensure complementary enforcement of this ,act4 7d7 ,reporting violations 7#a7 ,in general ,the ,federal ,trade ,commission and the ,secretary of ,labor shall each establish a system to receive complaints by individuals regarding alleged violations of section #c4 7#b7 ,confidentiality ,except as otherwise required by law1 the ,federal ,trade ,commission and the ,secretary of ,labor may not disclose the identity or identifying information of any individual providing a complaint under paragraph 7#a71 without explicit consent from the individual4 7e7 ,private right of action 7#a7 ,in general ,an individual who is aggrieved by a violation of this ,act may bring a civil action in any appropriate district court of the ,united ,states4 7#b7 ,relief ,in a civil action under paragraph 7#a71 a court may award-- 7,a7 any actual damages sustained by the individual as a result of the violation2 and 7,b7 in the case of any successful action1 the costs of the action and reasonable attorney's fees1 as determined by the court4 7f7 ,enforcement by ,states 7#a7 ,in general ,in any case in which the attorney general of a ,state has reason to believe that an interest of the residents of the ,state has been or is threatened or adversely affected by any person who violates any provision of section #c or #e7;a7 or any rule promulgated under this ,act to carry out such section1 the attorney general of the ,state1 as parens patriae1 may bring a civil action on behalf of the residents of the ,state in an appropriate ,state court or an appropriate district court of the ,united ,states to-- 7,a7 enjoin any further such violation by the person2 7,b7 compel compliance with section #c or #e7;a7 or any such rule2 7,c7 obtain a permanent1 temporary1 or preliminary injunction2 7,d7 obtain damages1 restitution1 or other compensation on behalf of the residents of the ,state2 or 7,e7 obtain any other appropriate equitable relief4 7#b7 ,preservation of state powers ,nothing in this subsection shall be construed as altering1 limiting1 or affecting the authority of the attorney general of a ,state to-- 7,a7 bring an action or other regulatory proceeding arising solely under the laws in effect in that ,state2 or 7,b7 exercise the powers conferred on the attorney general by the laws of the ,state1 including the ability to conduct investigations1 administer oaths or affirmations1 or compel the attendance of witnesses or the production of documentary or other evidence4 7g7 ,arbitration and class action ,notwithstanding any other provision of law1 no predispute arbitration agreement or predispute joint-action waiver shall be valid or enforceable with respect to any alleged violation of section #c or #e7;a74 #g4 ,reports ,not later than #a year after the date on which the ,secretary of ,labor issues any regulations under section #f7;b77#c71 the ,federal ,trade ,commission and the ,secretary of ,labor shall each submit to ,congress a report on any actions taken by the ,federal ,trade ,commission or ,secretary1 respectively1 to enforce the provisions of this ,act4 #h4 ,definitions ,for purposes of this ,act3 7#a7 ,business entity ,the term business entity means any partnership 7including a limited partnership or a limited liability partnership71 limited liability company 7including a series of a limited liability company formed under the laws of a jurisdiction that recognizes such a series71 or corporation4 7#b7 ,buyer ,the term buyer1 with respect to a business entity1 means any person who buys the goodwill of the business entity1 buys or otherwise acquires ownership interest in the business entity1 or buys a qualified asset or interest with regard to the business entity4 7#c7 ,class action ,the term class action means a lawsuit in which #a or more parties seek or obtain class treatment pursuant to rule #bc of the ,federal ,rules of ,civil ,procedure or a comparable rule or provision of ,state law4 7#d7 ,commerce ,the term commerce has the meaning given the term in section #c of the ,fair ,labor ,standards ,act of #aich 7#bi ,u4,s4,c4 #bjc74 7#e7 ,employ2 ,employee2 employer ,the terms employ1 employee1 and employer have the meanings given such terms in section #c of such ,act 7#bi ,u4,s4,c4 #bjc74 7#f7 ,noncompete agreement ,the term noncompete agreement means an agreement1 entered into after the date of enactment of this ,act between a person and an individual performing work for the person1 that restricts such individual1 after the working relationship between the person and individual terminates1 from performing-- 7,a7 any work for another person for a specified period of time2 7,b7 any work in a specified geographical area2 or 7,c7 any work for another person that is similar to such individual's work for the person that is a party to such agreement4 7#g7 ,owner of a business entity ,the term owner of a business entity means-- 7,a7 in the case of a business entity that is a partnership 7including a limited partnership or a limited liability partnership71 any partner2 7,b7 in the case of a business entity that is a limited liability company 7including a series of a limited liability company formed under the laws of a jurisdiction that recognizes such a series71 any member of such company2 or 7,c7 in the case of a business entity that is a corporation1 a capital stockholder of the business entity who owns not less than #e percent of the capital stock4 7#h7 ,ownership interest ,the term ownership interest means-- 7,a7 in the case of a business entity that is a partnership 7including a limited partnership or a limited liability partnership71 a partnership interest2 7,b7 in the case of a business entity that is a limited liability company 7including a series of a limited liability company formed under the laws of a jurisdiction that recognizes such a series71 a membership interest2 or 7,c7 in the case of a business entity that is a corporation1 not less than #e percent of the capital stock of the business entity or1 as applicable1 a subsidiary of the business entity4 7#i7 ,person ,the term person has the meaning given the term in section #c of the ,fair ,labor ,standards ,act of #aich 7#bi ,u4,s4,c4 #bjc74 7#aj7 ,predispute arbitration agreement ,the term predispute arbitration agreement means an agreement to arbitrate a dispute that has not yet arisen at the time of the making of the agreement4 7#aa7 ,predispute joint-action waiver ,the term predispute joint-action waiver means an agreement1 whether or not part of a predispute arbitration agreement1 that would prohibit1 or waive the right of1 one of the parties to the agreement to participate in a joint1 class1 or collective action in a judicial1 arbitral1 administrative1 or other forum1 concerning a dispute that has not yet arisen at the time of the making of the agreement4 7#ab7 ,qualified asset or interest ,the term qualified asset or interest1 with respect to a business entity1 means an asset or interest that is-- 7,a7 all or substantially all of the operating assets and the goodwill of the business entity2 7,b7 all or substantially all of the operating assets of a division1 or a subsidiary1 of the business entity and the goodwill of that division or subsidiary2 or 7,c7 all of the ownership interest of any subsidiary of the business entity4 7#ac7 ,sale ,the term sale1 with respect to a business entity1 means the sale of the goodwill of the business entity1 the sale or other disposal of all of the ownership interest of a seller in the business entity1 or the sale of a qualified asset or interest with regard to the business entity4 7#ad7 ,seller ,the term seller1 with respect to a business entity1 means any person who sells the goodwill of the business entity1 any owner of the business entity selling or otherwise disposing of all of his or her ownership interest in the business entity1 or any owner of the business entity that sells a qualified asset or interest with regard to the business entity4 7#ae7 ,senior executive official ,the term senior executive official1 with respect to a sale1 means an official who was acquired as an employee of the buyer in such sale through the terms and conditions of the sale1 and1 on the day before the date of such sale-- 7,a7 who was employed by the seller in such sale2 7,b7 who was responsible for making or directing major decisions of the seller2 and 7,c7 whose rate of compensation was in the highest #aj percent of the compensation rates for all employees of the seller4 7#af7 ,trade secret ,the term trade secret has the meaning given the term in section #ahci of title #ah1 ,united ,states ,code4