On May 4, 2017, The New York TimesTM published an op-ed by Orly Lobel regarding the policy issues surrounding enforcement of non-competes. Ms. Lobel is a Professor of Employment and Labor Law at the University of San Diego School of Law and is the author of “Talent Wants To Be Free: Why We Should Learn to Love Leaks, Raids, and Free Riding.”
In the opinion piece, Ms. Lobel lays out some of the policy arguments against stringent enforcement of non-competes, including whether such agreements reduce employee motivation, entrepreneurship and sharing of knowledge which she calls the “fundamental building blocks of innovation and economic growth.” According to Ms. Lobel, there is evidence that wages in states that enforce non-competes are 10% lower than in states that restrict their use. She also outlines non-compete reforms that have been introduced in states such as Colorado, Oregon, Illinois, and New York. Here is a link to Ms. Lobel’s article.
Whether greater enforcement of non-competes is good policy is a debate that has been raging for many years and is not likely to be decided anytime soon. Here is a link to a more detailed discussion of the various economic development and public policy implications of greater or lesser enforcement of non-competes.