Non-compete agreements, which prohibit individuals from starting or joining a competing business, stifle competition and harm worker mobility. They prevent workers from seeking out better opportunities and create a chilling effect on entrepreneurship.
Unfortunately, these contracts are increasingly pervasive. One in five employees, or approximately 32 million Americans, are currently bound by a non-compete. In total, 38 percent of workers have signed at least one non-compete agreement in the past.
The Economic Innovation Group supports federal reforms that limit the use of non-compete agreements, which would be among one of the most impactful ways to bolster entrepreneurship and improve the fortunes of workers across the country. The Workforce Mobility Act, bipartisan legislation introduced by Senator Todd Young (R-IN) and Senator Chris Murphy (D-CT), as well as Representatives Scott Peters (D-CA), Mike Gallagher (R-WI), and Anna Eschoo (D-CA), would end the widespread use of non-compete agreements in all but exceptional circumstances, promoting worker mobility and fostering economic dynamism.