A Bipartisan Bill Would Void Noncompetes for Workers Under $100,000 — Plan Ahead Now

Two members of Congress who rarely agree on anything have teamed up on a bill that would reach into almost every small employer's HR folder. Reps. Anna Paulina Luna (R-Fla.) and Ro Khanna (D-Calif.) introduced the Workers' Right to Compete Act, which would ban noncompete agreements for workers who earn less than $100,000 a year, according to Fox Business, which reported the bill text first on October 24, 2026.

It is only a proposal. It has not passed a committee or a vote, according to that report. But if you use noncompetes with hourly staff, stylists, technicians, sales reps or junior professionals, the bill shows where the politics are heading, and it is worth a short planning exercise today.

What the Bill Would Do

As reported, the Workers' Right to Compete Act would prohibit companies from imposing noncompete agreements on employees earning under $100,000 annually. Two details matter most for owners:

It would reach existing agreements. The bill would ban future and pre-existing noncompetes within 30 days of enactment, freeing workers who are already bound by signed contracts to take new jobs.
The threshold is pay-based. The coverage line is $100,000 in annual compensation, so the practical effect lands hardest on rank-and-file and mid-level roles, which is where most small businesses concentrate their hiring.

The Fox Business article did not mention exceptions, and it did not give a bill number. It also did not address how the bill would treat independent contractors, although Luna's statement refers to them. Read the actual text when it becomes available before drawing conclusions about your own contracts.

Why a Bipartisan Pair Is Pushing It

Khanna called the proposal "pro-innovation," "pro-growth" and "pro-wages," and said it could "bring the political spectrum together." Supporters point to data points that cut against the idea that noncompetes protect small firms:

Khanna cited KKR, which said noncompetes did not hurt the performance of companies it acquired after it banned them for lower-paid workers.
A Federal Reserve Bank of Minneapolis piece, cited in the report, found hourly workers' wages rose 2 to 3 percent after Oregon stopped enforcing noncompetes for them.
Khanna credited California's long-standing ban on noncompetes with helping Silicon Valley innovation.

Those are the proponents' arguments. Employer groups commonly respond that noncompetes protect training investments, client relationships and confidential information, and that other tools can protect a business without restricting where someone works. Both sides will make their case if hearings are scheduled.

How We Got Here

The Federal Trade Commission voted in 2024 to ban most noncompetes, but a federal district court struck the rule down and the agency abandoned it. That left the issue to states and to Congress. States have been moving: our coverage of Washington's coming noncompete ban is one example. A federal bill would replace that patchwork with a single national floor for lower-paid workers, at least on paper.

Why a Bill That Hasn't Passed Still Matters

Most introduced bills never become law, and this one has no reported committee action. Still, three reasons make it worth attention now:

Bipartisan sponsorship is unusual. A Republican and a Democrat on the same bill signals appeal beyond one party's base.
State law is already moving. If you operate in more than one state, you may already be bound by stricter rules than a federal bill would impose.
Contracts outlive the news cycle. A noncompete you sign today could be unenforceable in a year, and an employee who knows that may behave differently.

What Small Business Owners Should Do Now

1. Take inventory of who has a noncompete

List every employee and contractor who signed one, their role and their pay. Flag everyone under $100,000. If the bill became law as described, those agreements would stop being enforceable 30 days later.

2. Ask what each one is actually protecting

For each flagged agreement, write down the interest you want to protect: client lists, pricing, proprietary methods, training you paid for. Then check whether a narrower tool would do the same job.

3. Strengthen alternatives that do not depend on a noncompete

Consider confidentiality and trade-secret protections, non-solicitation clauses where your state allows them, clear invention and work-product language, and practical measures such as limiting who has access to the full client list. Have an attorney review the language for your state, since rules differ widely.

4. Make staying more attractive than leaving

The Minneapolis Fed finding cited by supporters suggests that when workers can leave freely, pay competition rises. Review your pay bands, schedules and growth paths for the roles you worry about losing.

5. Stop adding new noncompetes by default

If your offer-letter template includes a noncompete for every hire, ask whether it is necessary for entry-level and mid-level roles. A template that is out of step with your state's law can cost more than it protects.

6. Watch your state's rules

State law governs today. Sign up for your state labor department or bar association updates, and ask your employment attorney to flag changes.

Contractors, Employees and the $100,000 Line

Because the proposal turns on compensation, classification questions may matter. If you treat workers as independent contractors, check that the label matches the reality of the relationship. Our independent contractor vs. employee guide walks through the tests regulators use. Misclassification creates problems of its own, regardless of what happens to noncompetes.

What to Watch Next

Track four things: whether the bill gets a number and a committee assignment, whether employer groups publicly oppose it, whether a Senate companion appears, and whether the text includes carve-outs, such as sale-of-business agreements, which are often treated differently from employment noncompetes. Until then, nothing changes legally, so keep honoring valid agreements while you prepare.

If you are building a team and haven't set up your basics yet, our guides on LLC formation and the business license cover the foundation before you draft employment contracts.

The Bottom Line

The Workers' Right to Compete Act is an introduced bill, not a law. But it would void existing noncompetes for workers under $100,000 within 30 days of enactment, and its backers span the aisle. Use the time to find out who is covered by your agreements, what they protect, and what you would rely on if they disappeared.

This article is general information, not legal advice. Consult an employment attorney about your own contracts.

Photo by Israel Andrade on Unsplash