New Law Bans Noncompete Agreements for Most Workers, Boosting Job Mobility and Wages

The Workforce Mobility Act of 2025 is a massive win for anyone who has ever felt stuck in a job because of a contract. This bill essentially bans the use of noncompete agreements—those clauses that stop you from working for a competitor after you leave a company—for nearly all employees and contractors across the country. According to Section 3, any existing noncompete agreement you have right now will be void and unenforceable, unless it falls under one of the very specific, narrow exceptions.

The Great Escape: What Happens to Your Noncompete?

For the vast majority of workers, this bill means freedom. If you're a software engineer, a salesperson, a construction manager, or a line worker, your employer can no longer legally prevent you from jumping ship to a competitor for better pay or opportunities. Congress’s reasoning, laid out in Section 2, is that these agreements hurt worker wages and slow down the economy by keeping skilled people from moving where they can be most productive. The bill estimates that roughly one in five workers is currently bound by one of these agreements, and this change opens up the labor market for all of them.

This doesn't mean your employer is left defenseless, however. The Act is very clear (Section 4) that it doesn't touch trade secret laws or non-disclosure agreements (NDAs). If you have access to proprietary information—think customer lists that aren't public, secret formulas, or unreleased product designs—your employer can still require you to sign an NDA to protect those specific secrets. The key difference is that an NDA protects information, while a noncompete restricts your ability to work.

The Fine Print: Who Can Still Be Restricted?

While the ban is broad, there are two main carve-outs (Section 3) that affect business owners and top executives. First, if you sell a business, you can still agree not to start a similar venture in that same geographic area. This protects the buyer's investment in the goodwill of the business they just purchased. Second, there is a small exception for "senior executive officials" involved in a business sale. To qualify, you must have been one of the top 10% highest-paid employees before the sale and been responsible for making major decisions (Section 8). Even then, the noncompete can only last for one year and is only enforceable if the executive receives a severance package equivalent to what they would have earned during that year.

For the typical manager or skilled trade worker, these exceptions are irrelevant. But for those in the C-suite, it means that while they can still be restricted, the company must pay them handsomely for that restriction, ensuring they aren't left without income.

Teeth and Consequences: How This Law Gets Enforced

This bill doesn't mess around when it comes to enforcement (Section 6). Violations of the noncompete ban are treated like unfair business practices under the Federal Trade Commission (FTC) Act, giving the FTC full power to investigate and penalize companies that try to sneak these clauses in. The Department of Labor (DOL) also gets authority to investigate and sue employers to recover money for harmed employees, with a four-year statute of limitations.

Crucially, the law gives power directly to the people. If you are harmed by a company violating this Act, you can sue the company yourself in federal court and, if you win, the court must order the company to cover your attorney fees and court costs. Even better, any agreement you signed forcing you into private arbitration or preventing you from joining a class action lawsuit is completely invalid and unenforceable when it comes to disputes over this Act. This means companies can’t use contractual loopholes to shield themselves from accountability.

Finally, employers are required to post a notice explaining the new law where employees and applicants can easily see it, both physically and electronically (Section 5). If they don't, that's another violation the FTC and DOL can pursue. This is about making sure that the new rules are clear and accessible, putting the power back into the hands of the workers.