US authorities are seeking to outlaw agreements that allow companies to limit the ability of staff to leave for work at competitors.
The Federal Trade Commission says non-compete clauses were exploitative and unfairly limited the opportunities of an estimated 30 million Americans.
The US Chamber of Commerce, one of the most powerful business lobbies, called the proposal blatantly unlawful.
The FTC says non-compete clauses have become embedded in the US labour market, estimating that they affect roughly one in five workers.