HouseH.R. 10879119th Congress

Workers’ Right to Compete Act

Full Text

Official text as published. Use Ctrl+F / Cmd+F to search within the document.

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 10879 Introduced in House (IH)]

<DOC>

119th CONGRESS
  2d Session
                               H. R. 10879

To prohibit noncompete agreements for workers whose annual income falls 
          below specified thresholds, and for other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                            October 22, 2026

 Mr. Khanna (for himself and Mrs. Luna) introduced the following bill; 
       which was referred to the Committee on Energy and Commerce

_______________________________________________________________________

                                 A BILL

 
To prohibit noncompete agreements for workers whose annual income falls 
          below specified thresholds, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Workers' Right to Compete Act''.

SEC. 2. DEFINITION.

    In this Act:
            (1) Confidential business information.--
                    (A) In general.--The term ``confidential business 
                information'' means nonpublic commercial, financial, 
                operational, or proprietary information that--
                            (i) is not generally known or readily 
                        ascertainable by the public;
                            (ii) the employer has a legitimate business 
                        interest in maintaining as confidential; and
                            (iii) is subject to reasonable measures by 
                        the employer to maintain its confidentiality.
                    (B) Exclusions.--The term ``confidential business 
                information'' does not include--
                            (i) general knowledge, skills, training, or 
                        experience acquired by an individual during 
                        employment; or
                            (ii) information that is publicly available 
                        or otherwise lawfully obtained without an 
                        obligation of confidentiality.
            (2) Noncompete agreement.--The term ``noncompete 
        agreement'' means an agreement between a person and an 
        individual performing work for the person, that restricts such 
        individual, after the working relationship between the person 
        and individual terminates, from performing--
                    (A) any work for another person for a specified 
                period of time;
                    (B) any work in a specified geographical area; or
                    (C) any work for another person that is similar to 
                such individual's work for the person that is a party 
                to such agreement.
            (3) Trade secret.--The term ``trade secret'' has the 
        meaning given the term in section 1839 of title 18, United 
        States Code.

SEC. 3. PROHIBITING NONCOMPETE AGREEMENTS.

    (a) Prohibition.--
            (1) In general.--No person shall enter into, enforce, or 
        attempt to enforce a noncompete agreement with any individual 
        who is or was employed by, or performs or previously performed 
        work under contract with, such person with respect to the 
        activities of such person in or affecting commerce, if the 
        actual or expected annualized rate of cash compensation from 
        such person for such individual is less than $100,000, as 
        adjusted annually for inflation in accordance with paragraph 
        (2).
            (2) Inflation adjustment.--For each calendar year after 
        2026, the dollar amount specified in paragraph (1) shall be 
        increased by an amount equal to--
                    (A) such dollar amount; multiplied by
                    (B) the percentage by which the Consumer Price 
                Index for All Urban Consumers for the preceding 
                calendar year exceeds such index for calendar year 
                2026.
            (3) Effect of agreements.--Any noncompete agreement 
        prohibited under paragraph (1) shall be unenforceable, 
        including any agreement entered into before the date of 
        enactment of this Act.
            (4) Compensation determination.--For purposes of paragraph 
        (1), the annualized rate of cash compensation of an individual 
        shall be determined--
                    (A) in the case of a current employee or 
                contractor, at the time the noncompete agreement is 
                imposed as a condition of employment or at the time 
                enforcement is sought; and
                    (B) in the case of a former employee or contractor, 
                at the time the individual's employment or contractual 
                relationship terminated.
            (5) Variable compensation.--For purposes of determining the 
        annualized rate of cash compensation under paragraph (4) of a 
        current employee or contractor--
                    (A) in the case of an individual who has been 
                employed or engaged under contract for at least 12 
                months, commissions, bonuses, and other variable cash 
                compensation shall be calculated based on amount earned 
                during the preceding 12 months; and
                    (B) in the case of an individual who has been 
                employed or engaged under contract for fewer than 12 
                months, commissions, bonuses, and other variable cash 
                compensation shall be included only to the extent such 
                compensation is guaranteed.
    (b) Cash Compensation Defined.--In this section, the term ``cash 
compensation'' means compensation in the form of a salary, wage, 
overtime pay, commission, and cash bonus, or fee for services performed 
under contract paid or payable to an individual in exchange for 
services performed but does not include equity or equity-based 
compensation or any other compensation based on the value or 
appreciation of stock, regardless of whether such compensation is paid 
or settled in cash.

SEC. 4. NOTICE.

    (a) Notice.--Any person who employs or contracts with an individual 
described in section 3, or who previously employed or contracted with 
such an individual and entered into a noncompete agreement with such 
individual, with respect to activities in or affecting commerce, shall 
provide such individual with written notice that any noncompete 
agreement prohibited under this Act is unenforceable, not later than--
            (1) 30 days after the date of enactment of this Act, for an 
        existing or former employment or contractual relationship; or
            (2) 30 days after the commencement of any new employment or 
        contractual relationship entered into after the date of 
        enactment of this Act.

SEC. 5. ENFORCEMENT.

    (a) Federal Trade Commission.--
            (1) Unfair or deceptive acts or practices.--A violation of 
        section 3 or 4 shall be treated as a violation of a rule 
        defining an unfair or deceptive act or practice prescribed 
        under section 18(a)(1)(B) of the Federal Trade Commission Act 
        (15 U.S.C. 57a(a)(1)(B)).
            (2) Powers of commission.--
                    (A) In general.--The Federal Trade Commission shall 
                enforce section 3 and 4 in the same manner, by the same 
                means, and with the same jurisdiction, powers, and 
                duties as though all applicable terms and provisions of 
                the Federal Trade Commission Act (15 U.S.C. 41 et seq.) 
                were incorporated into and made a part of this Act.
                    (B) Privileges and immunities.--Any person who 
                violates section 3 or 4 shall be subject to the 
                penalties and entitled to the privileges and immunities 
                provided in the Federal Trade Commission Act (15 U.S.C. 
                41 et seq.).
                    (C) Authority preserved.--Nothing in this Act shall 
                be construed to limit the authority of the Federal 
                Trade Commission under any other provision of law.
    (b) Enforcement by States.--
            (1) 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 3 
        or 4, the attorney general of the State, as parens patriae, 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--
                    (A) enjoin any further such violation by the 
                person;
                    (B) compel compliance with section 3 or 4;
                    (C) obtain a permanent, temporary, or preliminary 
                injunction;
                    (D) obtain damages, restitution, or other 
                compensation on behalf of the residents of the State; 
                or
                    (E) obtain any other appropriate equitable relief.
            (2) Preservation of state powers.--Nothing in this 
        subsection shall be construed as altering, limiting, or 
        affecting the authority of the attorney general of a State to--
                    (A) bring an action or other regulatory proceeding 
                arising solely under the laws in effect in that State; 
                or
                    (B) exercise the powers conferred on the attorney 
                general by the laws of the State, including the ability 
                to conduct investigations, administer oaths or 
                affirmations, or compel the attendance of witnesses or 
                the production of documentary or other evidence.

SEC. 6. NO PREEMPTION OF STRONGER STATE LAWS.

    Nothing in this Act shall be construed to preempt or supersede any 
State law that provides greater protection against noncompete 
agreements than those provided under this Act.

SEC. 7. CONFIDENTIALITY AGREEMENTS.

    Nothing in this Act shall prohibit a person from entering into an 
agreement with an individual who is employed by, or performs work under 
contract with, such person with respect to the activities of such 
person in or affecting commerce to not disclose any information 
(including after the individual is no longer employed or performing 
work for the person) regarding the person, or the work performed by the 
individual for the person, that is a trade secret or confidential 
business information.
                                 <all>