Congress frees low-wage workers from noncompete traps

What it does

This bill prohibits employers from enforcing noncompete agreements against workers earning less than $100,000 per year (adjusted annually for inflation), making any such agreements unenforceable retroactively. Employers must notify affected workers within 30 days that their noncompete agreements are void. The bill preserves employers' ability to enforce confidentiality and trade-secret agreements, and allows states to impose stricter protections.

Why we flagged it

The bill's core mechanism is a straightforward prohibition on a specific employer practice (noncompete enforcement below a wage threshold) designed to expand worker freedom and labor-market competition. It is a direct labor-market regulation, not a tax provision, subsidy, or commemorative measure.

What the text implies

• The $100k threshold may create a two-tier labor market: lower-wage workers gain mobility while higher-paid workers remain subject to noncompetes, potentially widening inequality in job-switching freedom.
• Employers may respond by shifting compensation toward equity or non-cash benefits to push workers above the $100k threshold, indirectly increasing inequality in compensation structure.
• The bill's definition of 'cash compensation' explicitly excludes equity-based pay, creating a potential loophole for tech and startup employers to structure compensation to avoid the threshold.
• State attorneys general gain enforcement authority as parens patriae, potentially creating uneven enforcement across states and litigation risk for employers operating multistate.

Section numbers refer to the bill text the analysis read — linked under Primary records below.

Who it affects

Workers below the $100k threshold regain freedom to change jobs and compete for employment without legal restriction, increasing their bargaining power and economic mobility. Employers retain full ability to protect trade secrets and confidential information through non-disclosure agreements, so legitimate business interests are preserved.

Who stands to gain

• workers earning below $100,000 annually (increased job mobility and bargaining power)
• labor-intensive industries with high turnover (reduced enforcement costs for noncompetes)

Named in the bill

Federal Trade Commission, State attorneys general, Employers, Workers, Consumer Price Index for All Urban Consumers

Where it stands

1 cosponsor: 1 Republicans.

• Oct 22, 2026 — Introduced · Congress.gov: “Introduced in House”
• Oct 22, 2026 — Referred to House Committee on Energy and Commerce · Congress.gov: “Referred to the House Committee on Energy and Commerce”

Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.