Office of Economic Policy

U.S. Department of the Treasury

Non-compete Contracts: Economic Effects and Policy 

Implications

March 2016
2

Table of Contents

Executive Summary.................................................................................................................................... 3

Section I. Non-competes and Their Justifications ................................................................................... 6

Section II. What Can We Say About the Justifications? ...................................................................... 11

Section III. The Details of Non-compete Enforcement ......................................................................... 14

Section IV. Effects of Non-compete Enforcement ................................................................................. 18

Section V. Directions for Reform ............................................................................................................ 24

Appendix A ............................................................................................................................................... 27

Appendix B ............................................................................................................................................... 32

Works Cited .............................................................................................................................................. 34
3

Executive Summary

Non-compete agreements are contracts between workers and firms that delay employees’ ability 

to work for competing firms. Employers use these agreements for a variety of reasons: they can 

protect trade secrets, reduce labor turnover, impose costs on competing firms, and improve 

employer leverage in future negotiations with workers. However, many of these benefits come 

at the expense of workers and the broader economy. Recent research suggests that a 

considerable number of American workers (18 percent of all workers, or nearly 30 million 

people) are covered by non-compete agreements.1

 The prevalence of such agreements raises 

important questions about how they affect worker welfare, job mobility, business dynamics, and 

economic growth more generally. This report presents insights from economic theory and 

evidence on the economic effects of non-compete agreements. It goes on to discuss policy 

implications, starting a discussion about how such agreements could be used in a way that 

balances the interests of firms with those of workers and society as a whole.

Non-compete agreements have social benefits in some situations.

• Non-competes are sometimes used to protect trade secrets, which can promote 

innovation.

• By reducing the probability of worker exit, non-competes may increase employers’ 

incentives to provide costly training.

• Employers with especially high turnover costs could use non-competes to match with 

workers who have a low desire to switch jobs in the future.

But non-compete agreements can also impose large costs on workers.

• Worker bargaining power is reduced after a non-compete is signed, possibly leading to 

lower wages.

• Non-competes sometimes induce workers to leave their occupations entirely, foregoing 

accumulated training and experience in their fields.

 1 These and other similar numbers throughout the executive summary and report are from Starr, Bishara, and 

Prescott (2015) and private correspondence with the authors. Note that all figures are preliminary and may change 

slightly. 
4

• Reduced job churn caused by non-competes is itself a concern for the U.S. economy. Job 

churn helps to raise labor productivity by achieving a better matching of workers and 

firms, and may facilitate the development of industrial clusters like Silicon Valley. 

Moreover, there is reason to believe that many specific instances of non-compete

agreements are less likely to produce social benefits.

• Non-competes are often used by employers in non-transparent ways:

o Many workers do not realize when they accept a job that they have signed a noncompete, or they do not understand its implications.

o Many workers are asked to sign a non-compete only after accepting a job offer. 

One lower-bound estimate is that 37 percent of workers are in this position.

o Many firms ask workers to sign non-competes that are entirely or partly 

unenforceable in certain jurisdictions, suggesting that firms may be relying on a 

lack of worker knowledge. For instance, California workers are bound by noncompetes at a rate slightly higher than the national average (19 percent), despite 

the fact that, with limited exceptions, non-competes are not enforced in that state.2

 

• Only 24 percent of workers report that they possess trade secrets. Moreover, less than 

half of workers who have non-competes also report possessing trade secrets, suggesting 

that trade secrets cannot explain the majority of non-compete activity. 

• Non-competes are common among workers who report lower rates of trade secret 

possession: 15 percent of workers without a four-year college degree are subject to noncompetes, and 14 percent of workers earning less than $40,000 have non-competes. This 

is true even though workers without four-year degrees are half as likely to possess trade 

secrets as those with four-year degrees, and workers earning less than $40,000 possess 

trade secrets at less than half the rate of their higher-earning counterparts.

• Available evidence suggests that workers with a low initial desire to switch jobs are not

more likely to match with employers who require non-competes.

• In some cases, non-competes prevent workers from finding new employment even after 

being fired without cause; in such cases, it is difficult to believe that non-competes yield 

social benefits.

 2 Depending on the facts of the individual case, such non-competes may be enforced in other states.
5

States vary greatly in the manner and degree to which they will enforce non-competes.

• In some states, non-compete enforcement is determined by statute, while in others it is 

determined exclusively by case law. 

• Some states refuse to enforce non-competes, or refuse to enforce non-competes that 

contain any unenforceable provisions (“red-pencil” doctrine), although a majority of 

states will modify overbroad non-compete contracts to render them enforceable (“bluepencil” and “equitable reform” doctrines).

The analysis in this report suggests several broad recommendations that would minimize 

the harms associated with non-compete agreements.

• Increase transparency in the offering of non-competes.

• Encourage employers to use enforceable non-compete contracts.

• Require that firms provide “consideration” to workers bound by non-compete contracts in 

exchange for both signing and abiding by non-competes.
6

I. Non-competes and Their Justifications3

Non-compete contracts – agreements between workers and firms that restrict workers’ ability to 

take new employment – have a long history, but their scope, prevalence, and enforcement have 

varied widely across time and place. With the recent development of more comprehensive data 

on their usage, it has become more apparent that non-competes are an important labor market 

institution meriting careful study. Recent research shows that as many as 30 million workers are 

currently covered by non-compete agreements. While in some cases non-compete agreements 

can promote innovation, their misuse can benefit firms at the expense of workers and the broader 

economy. Details of non-competes and their enforcement have implications for worker 

bargaining power, job mobility, and economic growth. This report draws on insights from 

economic theory, as well as a rapidly growing body of empirical evidence, to help clarify 

thinking about non-competes and non-compete reform. 

What are non-competes and who is bound by them?

Many employers ask their employees to sign non-compete agreements. The details of these 

contracts vary greatly across firms and states, but they share a common purpose: restricting the 

ability of a worker to compete with his or her current employer for some specified period of 

time, often in a specified geographic area. Typically, this takes the form of a prohibition on 

taking employment at a rival firm, where “rival” may be interpreted quite broadly to include all 

firms within a given industry. 

Non-compete agreements have become quite common among a variety of types of workers. As 

shown in the chart below, roughly 18 percent of workers currently report working under a noncompete agreement and about 37 percent of workers report having worked under one at some 

point during their career. Although such agreements are less common among less-educated 

workers and lower-income workers, the fractions of these workers operating under one are still 

substantial.

4

 3 This report benefited greatly from discussions with Professor Evan Starr, and we are grateful for his time and 

expertise. We also make extensive use of Starr, Bishara, and Prescott (2015). However, the views expressed here 

are not necessarily those of Starr and his coauthors, nor are they implicated in any errors. 4 See Starr, Bishara, and Prescott (2015).
7

How are non-competes typically justified?

The conventional picture of a workplace characterized by non-compete agreements is one that 

features trade secrets, including sophisticated technical information and business practices that 

firms have a strong interest in protecting. By preventing a worker from taking such secrets to a 

firm’s competitors, the non-compete essentially solves a “hold-up” problem: ex ante, both 

worker and firm have an interest in sharing vital information, as this raises the worker’s 

productivity. But ex post, the worker has an incentive to threaten the firm with divulgence of the 

information, raising his or her compensation by some amount equal to or less than the firm’s 

valuation of the information. Predicting this state of affairs, the firm is unwilling to share the 

information in the first place unless it has some legal recourse like a non-compete contract.

Occasionally, client relationships are included along with trade secrets in this explanation (and 

are sometimes treated similarly as a matter of state law). However, it is not clear that 

relationships with clients constitute a socially valuable investment analogous to trade secrets.5

 

For this reason, trade secrets will be the focus of discussion in this report. 

 5 For instance, a trade secret involving intellectual property may be the product of expensive investments. If the 

investment had not been made, none of the benefits of the property would have been realized. By contrast, the 
8

While non-competes help solve the trade secrets “hold-up” problem, they are not the only tool at 

employers’ disposal. States generally have laws prohibiting theft or disclosure of trade secrets. 

In addition, employers can use compensation schemes that discourage turnover for workers with 

trade secret access (e.g., employers may provide additional compensation contingent on the 

worker remaining at the firm).6

 We provide further evidence regarding trade secrets later in the 

report. 

What are other possible explanations?

What might explain the existence of non-competes among workers who are not plausibly 

affected by the sort of trade secrets discussed previously? A number of explanations have been 

suggested. One possibility (training) – which may coexist with either of the next two

explanations – is that firms and workers use non-competes to encourage more investment in 

workers. In general, firms are reluctant to pay for training that improves a worker’s “general” 

skills and makes her more valuable to it and other firms alike. Economists usually think of 

general training as occurring when workers accept wage cuts to compensate their employer for 

its expenses in providing the training.7 For various practical reasons, however, workers may be 

unwilling to pay for training.

8

 Non-competes offer an alternative: firms get an assurance that 

workers are unlikely to leave for some period of time, allowing the firm to capture more of the 

increased productivity from costly training it provides, and workers receive more training than 

they otherwise would. 

Another possibility (screening) is that non-competes are an attempt by firms to preferentially 

hire workers with a low likelihood of departure. Underlying this alternative is the assumption

that firms face substantial costs for hiring and separating with workers.9 Moreover, it is not 

obvious to firms which workers are most likely to exit, and workers cannot credibly assert their 

probability of leaving (i.e., all workers will pretend to have a very low probability, as this raises 

their perceived value to the firm). By making non-competes a condition of employment, firms 

 client, and their need for a good or service, presumably exist independently of any investment made by the 

employer. 

6 See Salop and Salop (1976) for one discussion of such a mechanism. 

7 See Becker (1962). 8 For instance, workers may be credit-constrained and unable to finance the training, or workers may have difficulty 

observing the quality of the training, rendering them less willing to pay for it. 9 See Hamermesh (1995). 
9

reduce the value of the job to those workers who know they are likely to depart. For those 

workers who do not expect to leave imminently, the non-compete is less of an imposition. Note 

that in order for this explanation to be correct, prospective workers must understand the noncompete and its implications.

A final explanation (henceforth referred to as lack of salience) is that workers do not pay 

attention to non-compete contracts and do not realize how much bargaining power and future 

employment flexibility they are foregoing. Only later, when workers consider exiting a firm, do 

they become aware of the existence and/or implications of the non-compete agreement.10 Other 

workers may be aware of the non-compete, but only after it is presented to them once they have 

accepted a position or started working, and not at the time the job offer was originally extended. 

According to this explanation, only employers benefit from the non-compete, as they obtain

increased bargaining power in future wage negotiations, reduced turnover costs, and possible 

impairment of rivals’ ability to hire. 

How do the different non-compete explanations affect the optimal policy response?

The explanations for non-compete agreements described above have different implications for 

the desirability of such agreements. Thinking through these implications helps to shed light on 

the appropriate policy response. The first three explanations – trade secrets, training, and 

screening – suggest that non-competes can be socially desirable. The last explanation, lack of 

salience, suggests that non-competes are socially harmful.

The conventional explanation for non-compete agreements involving protection of trade secrets

is a potentially strong justification for such agreements where it genuinely applies, and where 

other devices for protection of employers (like trade secrets law) are not effective. As previously 

discussed, non-competes can encourage additional economic activity and broader information 

sharing when trade secrets are significant. 

The training and screening explanations for non-compete agreements also suggest social 

benefits. If worker training is sufficiently enhanced by the availability of non-competes, or if 

 10 Research in other contexts has found a large role for salience considerations. See Kahneman (2003) for a 

discussion of salience as it relates to behavioral economics, and Feldman, Katuscak, and Kawano (2016) for an 

example from the tax literature.
10

firms with unusually high separation costs are able to match more appropriately with workers,

both worker and firm are better off. Balanced against these benefits are the social costs 

associated with diminished mobility. 

The final explanation for non-compete agreements – lack of salience – implies that noncompetes are merely a costly transfer from workers to firms, made possible by workers’ lack of 

awareness. According to this explanation, non-competes lead to diminished worker mobility and

a loss of human capital, with no corresponding benefit to society. When workers are legally 

prevented from accepting competitors’ offers, those workers have less leverage in wage 

negotiations and fewer opportunities to develop their careers outside of their current firm. By 

contrast, the firms using non-competes benefit through reduced turnover costs, increased 

bargaining power, and denial of valuable employees to competitors. 

Constructing ideal policy for non-competes requires determining which explanation is most 

relevant for a particular type of worker (i.e., for low-skill service workers vs. high-skill IT 

workers), and balancing the trade-offs between non-competes’ benefits and their undesirable 

consequences. For instance, low-wage workers may be particularly poorly served by noncompetes due to the lower likelihood that trade secrets are relevant. 

However, it is not always easy to distinguish among the different explanations for non-competes, 

and several possible reforms are beneficial regardless of the underlying explanation. For 

example, measures to improve the salience and transparency of non-competes and non-compete 

enforceability are broadly useful and will help to minimize the worst effects of non-competes. 

In Section V, some directions for policy reform are described and their reasoning briefly 

explained.
11

II. What Can We Say About the Justifications?

Research on non-competes is still at an early stage. However, a recent paper provides 

comprehensive data on workers with non-competes, answering many of the most important 

questions about these workers.

11 In addition to collecting information on the characteristics of 

workers who sign non-competes, this research also examines the extent to which workers with 

non-competes actually interact with clients, have access to client-specific information, and work 

with trade secrets.

12 This section summarizes the literature examining the different rationales for 

non-compete agreements.

Protecting trade secrets. If protection of trade secrets were the main explanation for noncompete agreements, then one would expect such agreements to be highly concentrated among 

workers with advanced education and occupations likely to feature trade secrets.13,14 However, 

the fraction of workers without a four-year college degree reporting a current non-compete

agreement is about 15 percent, only slightly below the 18 percent share for all workers.

15 While 

engineering and computer/mathematical occupations have the highest non-compete prevalence at 

slightly more than one-third, occupations like personal services and installation and repair also 

include many workers with non-competes, at about 18 percent. When entry-level workers at fast 

food restaurants are asked to sign two-year non-competes, it becomes less plausible that trade 

secrets are always the primary motivation for such agreements.

16

Unsurprisingly, workers who reported access to trade secrets were much more likely to be bound 

by a non-compete, with about a 25 percentage point higher probability than those who report no 

interaction with clients, no access to client-specific information, and no possession of trade 

secrets. The link between client access and non-competes is not as strong: those who report such 

 11 See Starr, Bishara, and Prescott (2015). 12 As the authors’ data is collected through an online survey, achieving a representative sample may be challenging. 

The authors note, however, that more traditional survey designs face similar difficulties.

13 Note that not all trade secrets are equivalent from an economic perspective. Though the legal definition of trade 

secrets embraces a wide variety of private information (e.g., fast-food recipes), some of these examples may not 

involve a substantial “hold-up” problem of the kind described above. 14 See Starr, Bishara, and Prescott (2015) for evidence that occupations and income groups differ substantially in the 

degree to which they involve trade secrets.

15 See Starr, Bishara, and Prescott (2015). 16 See http://www.forbes.com/sites/clareoconnor/2014/10/15/does-jimmy-johns-non-compete-clause-for-sandwichmakers-have-legal-legs/. 
12

access (but no trade secrets) have about a 7 percentage point higher probability of a noncompete. However, less than half of all workers with non-competes report possessing trade 

secrets. Together, these findings suggest that the trade secrets explanation is likely part, but not 

all, of the story of non-competes. 

Encouraging training. Non-compete enforcement is associated with more worker training. Evan 

Starr finds that a “one standard deviation increase in a state’s overall enforceability level 

increases the probability that the average high litigation occupation receives firm-sponsored 

training by 2.4% relative to low litigation occupations.”17 Interestingly, this work finds that 

when states require firms to offer substantial “consideration” along with a non-compete (e.g., 

promotions, training, and higher wages), both training and wage outcomes for workers are 

improved. 

Facilitating screening. Starr, Bishara, and Prescott have developed data that are directly relevant

to the question of screening by asking their survey respondents how long they expected to work 

for their current employer, then comparing the responses of workers who have and have not 

signed non-competes. Interestingly, after controlling for various demographic and economic 

variables, there is no relationship between expected tenure and likelihood of having signed a 

non-compete. This result suggests that screening is not an important part of the non-compete 

story. 

Exploiting lack of salience. Several pieces of evidence suggest that employers are relying on 

workers’ incomplete understanding of non-compete agreements. First, employers often require 

that workers sign non-compete agreements even in states that refuse to enforce them. For 

example, in California, which (with limited exceptions) does not enforce non-compete 

agreements, the fraction of workers currently under a non-compete is 19 percent, which is

slightly higher than the national average. 

Second, a separate survey, exclusively focused on members of the Institute of Electrical and 

Electronics Engineers, reports that “...barely 3 in 10 workers reported that they were told about 

the non-compete in their job offer. In nearly 70% of cases, the worker was asked to sign the 

 17 See Starr (2015), page 3. “Enforceability level” is defined by Starr to capture all the dimensions of non-compete 

enforcement, and “high-litigation” refers to occupations characterized by more legal action related to non-compete 

contracts.
13

non-compete after accepting the offer – and, consequently, after having turned down (all) other 

offers. Nearly half the time, the non-compete was not presented to employees until or after the 

first day at work.”18 This evidence is especially powerful insofar as it applies to highlyeducated, high-wage workers who might be considered more likely to understand the process 

surrounding non-competes. Even in cases where the conventional explanation of trade secrets 

has a surface plausibility, firms often delay the presentation of non-competes. This behavior 

would not be necessary if non-competes were a mutually-beneficial arrangement. 

Finally, Starr, Bishara, and Prescott (2015) find that only 10 percent of workers with noncompetes report bargaining over their non-compete, with 38 percent of the non-bargainers not 

realizing that they could even negotiate.19 Moreover, workers appear confused as to whether 

non-competes are even enforceable in their states. In preliminary work by Starr and coauthors, 

workers are shown to be frequently incorrect or unsure as to whether their non-competes are 

actually enforceable. Again, this is not consistent with a “perfect information” setting in which 

workers knowingly accepted the limitations imposed by non-competes. 

 18 See Marx and Fleming (2012), page 49.

19 See Starr, Bishara, and Prescott (2015).
14

III. The Details of Non-compete Enforcement 

Non-compete enforcement differs significantly across states. Some relevant terms of art are 

defined below.

Non-compete contract: A contract that delays or in some other way restricts a 

worker’s ability to compete with a previous employer. Typically this entails restrictions on 

future employment.

Consideration: A benefit received by a signatory to a contract. Generally, both 

parties must receive consideration in order for a contract to be valid. Consideration commonly 

includes property or promises of specific actions. In the case of a non-compete, consideration 

may sometimes refer to wage increases, promotions, or continued employment (sometimes 

including hiring).

Protectable interests: These are the aspects of an employer-employee 

relationship that provide the legal motivation for a non-compete agreement. They vary state to 

state, but frequently include trade secrets, confidential information, goodwill, and/or client

relationships. Some states additionally provide protection for special training.

Red-pencil doctrine: Doctrine prevailing in some states requiring that courts 

must declare an entire non-compete contract void if one or more of its provisions are found to be 

defective under state law or precedent.

Blue-pencil doctrine: Doctrine prevailing in some states requiring that courts 

delete provisions of a non-compete contract that render it overbroad or otherwise defective, 

retaining the enforceable subset of the contract.

Equitable reform, aka Reformation: Doctrine prevailing in some states 

requiring that courts may rewrite a non-compete contract so as to render it non-defective. Unlike 

blue-pencil doctrine, this may entail insertions of new text. 
15

Currently, nearly all states will enforce non-compete agreements to some extent. Within those 

states, non-compete enforcement may be restricted in a variety of ways that vary from state to 

state. See Beck Reed Riden LLP for a summary of state rules.20

Judicial modification of non-competes. Rather than declaring specific contracts completely 

enforceable or unenforceable, courts in certain states may alter the contracts themselves. In 

those states, judges may declare portions of a contract void but other parts to be valid under what 

is called “blue pencil doctrine.” 

The following stylized example may help to explain how this doctrine might work. Suppose that 

a contract states that “The employee agrees not to work for any business competitive with the 

employer for one year in the following counties: Leelanau, Benzie, and Manistee.” Purely 

hypothetically, a judge might find the inclusion of Benzie to be overbroad, and could determine 

that the non-compete is valid once Benzie County is removed. However, as blue-pencil doctrine 

does not allow a court to add terms to a contract, the contract could not be revised to add “agrees 

not to work in an administrative capacity”, were the court to hold that this qualifier was 

necessary to prevent the contract from being overbroad. 

In other states, an “equitable reform” or “reformation” doctrine allows judges to amend the 

language in question to generate an enforceable contract consistent with the original intent of the 

existing contract.

21 This allows more flexibility than the blue pencil rule and increases the 

likelihood of a non-compete being upheld in some form, all else equal. It may also encourage 

firms to take risks in the writing of contracts, including provisions likely to be struck down. If 

workers do not have a good sense of which parts of a contract are enforceable, then these 

untenable provisions may still affect their behavior. On the opposite end of the spectrum, some 

states simply do not allow any judicial modification of contracts, but instead hold that any 

unenforceable provisions render the entire contract unenforceable. This is sometimes known as 

“red-pencil” doctrine. 

 20 Other summaries of non-compete law exist and are in some cases slightly inconsistent with the Beck Reed Riden 

table we use; see “Summary of Covenants Not to Compete: A Global Perspective” by Fenwick and West LLP, for 

one alternative. 

21 In some cases, this doctrine is (confusingly) also referred to as “blue-pencil.” 
16

The figure below illustrates findings by one survey of the use of each rule by state.

22 See 

Appendix B for additional figures illustrating the survey’s findings regarding other important 

dimensions of non-compete enforcement, including treatment of trade secrets, enforceability in 

case of firing without cause, and whether “continued employment” counts as worker 

consideration in exchange for a non-compete.

Quits vs. Layoffs. The paradigmatic case of non-compete enforcement is one in which an 

employee quits and is prevented from working for a competitor. However, even fired workers 

are often bound by non-compete contracts. One survey reports that, as of 2015, non-competes 

were enforceable against employees discharged without cause in about half of states.

23

Recent changes in non-compete enforcement. Several states have recently altered their 

approaches to non-compete enforcement. Notably, Georgia amended its constitution in 2011 to 

allow for increased enforcement of non-compete agreements.

24 Other states have altered their 

statutes to extend or limit the reaches of non-competes, as with a recent statute in Alabama that 

more explicitly explains what is and is not a valid protectable interest. Like Alabama, Oregon 

passed a statute that more clearly defines the bounds of a non-compete. As of 2016, new noncompetes in Oregon will be limited to a maximum of 18-month duration. New Mexico also 

 22 Alaska and Hawaii, not shown, are both “reformation” states. 23 See Beck Reed Riden LLP (2015). 24 See http://www.lexology.com/library/detail.aspx?g=aadbea62-9a31-4ae3-92dd-8198906c37f6. 

Not enforced

Undecided

Red pencil

Blue pencil

Reformation

Source: A State by State Survey of Employee Noncompetes, Beck Reed Riden

Non-compete Enforcement Regime
17

more clearly defined the bounds of non-competes, restricting their enforceability for certain

health care practitioners. In Hawaii, non-competes have been prohibited for tech workers.25

In other states, legislators have recently proposed significant changes. A bill similar to that 

passed in Hawaii was introduced, but not enacted, in Missouri. In New Jersey and Maryland, 

bills were proposed that would render non-competes unenforceable for any workers eligible to 

receive unemployment compensation. State legislators in Massachusetts, Michigan, and 

Washington have proposed that non-competes be made largely unenforceable in their states. 

Finally, Senators Franken and Murphy have proposed that firms be prohibited from entering into 

non-compete agreements with workers making less than $15 per hour.26

Appendix A provides a brief summary of the development of non-compete law over the long run. 

 25 See https://legiscan.com/AL/bill/HB352/2015, http://gov.oregonlive.com/bill/2015/HB3236/, 

http://www.nmlegis.gov/lcs/legislation.aspx?chamber=S&legtype=B&legno=325&year=15, and 

http://www.capitol.hawaii.gov/session2015/bills/HB1090_CD1_.HTM, for Alabama, Oregon, New Mexico, and 

Hawaii law, respectively. 

26 Private correspondence with Evan Starr. See 

http://house.mo.gov/billtracking/bills151/billpdf/intro/HB0597I.PDF, 

http://www.njleg.state.nj.us/2012/Bills/A4000/3970_I1.HTM, 

http://mgaleg.maryland.gov/2013RS/fnotes/bil_0001/sb0051.pdf, https://malegislature.gov/Bills/189/House/H1701, 

http://www.legislature.mi.gov/(S(eemdorjddeyzki1vwou5lszu))/mileg.aspx?page=GetObject&objectName=2015-

HB-4198, http://app.leg.wa.gov/billinfo/summary.aspx?year=2015&bill=2931, for Missouri, New Jersey, Maryland, 

Massachusetts, Michigan, and Washington, respectively. See 

http://www.franken.senate.gov/files/documents/150604MOVEsummary.pdf for the proposed federal bill.
18

IV. Effects of Non-compete Enforcement 

The effects of non-compete enforcement on mobility. According to authors of a recent study, the 

state of Michigan inadvertently “legalized” non-competes in 1985.27 This presented a rarely 

available opportunity to study the effect of non-compete enforcement. Typically, it is difficult to 

rule out the possibility that changes in law reflect changes in current or expected economic 

circumstances. Thus, a simple comparison of economic outcomes before and after a state 

legalizes non-competes will include the effects of both these changes in circumstances and noncompete enforcement itself, making it difficult to separately estimate the latter effect. But in the 

case of Michigan, with its allegedly accidental and unanticipated change in the enforceability of 

non-competes, researchers can more reliably interpret changes in outcomes (e.g., labor mobility) 

as being caused by non-compete enforcement. 

Marx, Strumsky, and Fleming exploit this natural experiment, showing that worker job mobility 

fell by 8 percent when non-competes were made enforceable, with the effect even larger for 

workers with more narrowly-focused human capital. However, other authors dispute these 

findings, arguing that the inadvertent legalization was not retroactive and that some states were 

inappropriately labeled as “non-enforcing.”28 In separate work, Marx finds that workers who do 

switch jobs are more likely to leave their industry if they are covered by a non-compete, with the 

attendant “reduced compensation, atrophy of their skills, and estrangement from their 

professional networks” that would be expected to occur.29 

The effects of non-compete enforcement on wages. The literature on the effect of non-competes 

on wages is small, consisting largely of case studies, surveys of specific professions (e.g., 

electrical engineers), theoretical papers, and a recent analysis based on a broad online survey.

30

We therefore combine information from previous literature on enforceability and non-compete 

prevalence with standard labor market data, generating suggestive evidence on the wage impacts 

 27 See Marx and Fleming (2012) for details. 28 See Sichelman and Barnett (2015). 

29 See Marx, Strumsky, and Fleming (2009) and Marx (2011). 30 See various papers by Marx, Marx and Fleming (2012), Meccheri (2009), and Starr, Bishara, and Prescott (2015), 

respectively. We are not aware of any panel data with individual responses to questions about non-competes, and 

existing work typically does not present population-wide inferences about the wage effects of non-compete 

enforcement.
19

of non-compete enforcement.31 Interestingly, we find stricter non-compete enforcement to be 

associated with both lower wage growth and lower initial wages.32

The first column of Table 1 shows the percentage change in wages from a one-unit increase in a 

non-compete enforceability index, holding constant a number of worker characteristics.33 It 

suggests that a standard deviation in non-compete enforcement reduces wages by about 1.4 

percent. Recent work by Starr and coauthors finds broadly similar results to those presented 

here.34

It is possible to refine this approach by focusing more narrowly on populations likely to be 

affected by non-competes. Workers with bachelor's degrees are more than 50 percent more

likely to be bound by non-competes than those without, suggesting that one might better 

approximate the “eligible” subgroup by restricting the sample to workers with bachelor's 

degrees. This is shown in Table 1, column 2. Note that the magnitude of the wage effect of noncompete enforcement increases for this subgroup, as expected. A slightly more nuanced

approach makes use of the occupational breakdown provided in recent work. Rather than 

omitting non-college workers, we instead reweight the sample to be more representative of

workers with non-competes. For example, this will imply placing a higher weight on workers in

the architecture and engineering occupations than in the personal services occupations. Table 1, 

column 3 shows results from this reweighted approach. The magnitude of the wage impact is 

again above that of column 1, but not dramatically so.

35 

 31 We use the 2014 merged outgoing rotation groups of the Current Population Survey (CPS), which provide a cross 

section of population-representative workers. Merged with this data is the Starr-Bishara index of non-compete 

enforceability by state (generously provided by Evan Starr), as well as the fraction of workers with non-competes by 

major occupation from Starr, Bishara, and Prescott (2015). 32 Here again, the particular proposed explanation for non-competes is important. For instance, if screening is the 

dominant explanation, and workers are fully informed about non-competes, we would expect stricter enforcement to 

cause an initial wage premium but slower subsequent wage growth. Workers would only be willing to sign the noncompete if they were compensated at the time of signing. If, on the other hand, salience is the dominant 

explanation, we would expect no initial premium and slower wage growth, as workers are prevented from taking 

advantage of outside opportunities or using outside opportunities as leverage for wage growth at the current firm. 33 These controls consist of education, age, gender, marital status, occupation, industry, public sector status, and 

union status.

34 See forthcoming work by Balasubramanian, Chang, Sakakibara, Sivadasan, and Starr, as well as Starr, Ganco, and 

Campbell. 35 This is perhaps to be expected given the fact that that non-competes are used quite broadly. While non-competes 

are more common in particular occupations (e.g., management, computer and mathematical, and architectural and 

engineering occupations), they are also found in a wide variety of unexpected occupations and education levels.
20

Much of the research on non-competes has focused on their relationship with on-the-job training. 

Non-competes and non-compete enforceability may affect the rate at which wages grow with 

employee tenure and experience. We therefore examine the association of non-compete

enforceability with age-wage profiles, i.e., the rate at which wages increase with age. 

Figures 1 and 2 below are plots of age-wage profiles in a minimally-enforcing state and a 

maximally-enforcing state, for original and occupation-reweighted samples, respectively. As 

workers age, the effect of tightened non-compete enforcement appears to rise: using the original 

sample, the effect of maximal enforcement, relative to minimal enforcement, is 5 percent at age 

25 and 10 percent at age 50. As with the previous results, the occupation-reweighted projections 

show a somewhat larger difference between wages in minimally- and maximally-enforcing 

states.

Are these results surprising? If non-competes existed exclusively to promote training, one would 

expect states with stronger enforcement to see faster wage growth over the life cycle. If, on the 

other hand, non-competes are the product of a lack of salience for workers, one would instead 

expect to see the pattern shown in Figures 1 and 2.36 As workers progress through their careers, 

switching jobs is more difficult in states that stringently enforce non-competes. Given that job 

 36 When interpreting any of the results just described, it should be remembered that we are not exploiting variation 

over time in non-compete enforcement; rather, the wage estimates are derived from variation across states. Even 

after controlling for available worker-level variables, states may differ in ways that are both relevant to wage growth 

and non-compete enforcement. As such, the results shown here should be seen as merely suggestive. 

Original sample College-only Occupation-reweighted

Enforcement -1.38% -1.86% -1.52%

(-13.55) (9.73) (12.49)

N 163,252 57,156 163,252

R2 0.43 0.25 0.43

Source: 2014 Current Population Survey, Starr et al. (2015), private correspondence with Starr, and Treasury calculations. All 

estimates are conditional on education, marital status, union status, sex, major occupation and industry, public sector status, and a 

quadratic in age. T-statistics are in parentheses.

Table 1. Wage effect of one standard deviation of noncompete enforcement
21

switching is generally associated with substantial wage increases, this increased difficulty of 

switching would reduce wage growth over time.37 

 37 See Topel and Ward (1992). 12 14 16 18 20 22 24 Hourly wage

20 30 40 50 60

Age

No enforcement Max enforcement

Source: 2014 Current Population Survey, Starr et al. (2015), and Treasury calculations. All

variables, with the exception of enforcement index and age, are held constant at their means.

Original sample

Figure 1. Age-Wage Profile by State Enforcement Regime

12 14 16 18 20 22 24 Hourly wage

20 30 40 50 60

Age

No enforcement Max enforcement

Source: 2014 Current Population Survey, Starr et al. (2015), and Treasury calculations. All

variables, with the exception of enforcement index and age, are held constant at their means.

Occupation-reweighted

Figure 2. Age-Wage Profile by State Enforcement Regime
22

Non-compete enforcement and aggregate impacts. Thus far, we have discussed the effects of 

non-competes on individual workers. But non-compete enforcement may matter for cities, 

states, and regions in ways that cannot be fully understood at the individual level. Whether noncompetes are beneficial or harmful for a single worker and a single firm, there are potential 

spillovers across workers and firms, particularly related to information.

In urban economics, regions are subject to so-called “agglomeration effects.” For instance, hightech firms do not locate randomly, but tend to cluster in places like Silicon Valley. This 

clustering is due to a number of factors that include the availability of a large, deep pool of 

workers with relevant skills, a more competitive market of suppliers, and information spillovers 

across workers and firms. This last factor is important in connection with non-competes. When 

firms in a given industry are clustered, it becomes easier for their workers to share expertise and 

discoveries. While not always in the interest of a particular firm, this sharing can redound to the 

advantage of the larger economy, making the cluster an attractive destination for firms. 

One important facilitator of this sharing is, unsurprisingly, the movement of workers across firms 

within industry. Employee departures impose costs on their firms, but yield benefits for 

destination firms and act to broadly disseminate improvements in technologies and best 

practices. Non-compete enforcement can stifle this mobility, thereby limiting the process that 

leads to agglomeration economies.

Many observers have suggested that Silicon Valley is a prime example of this phenomenon.38

California, along with some other states, generally does not enforce non-compete agreements. It 

would be difficult to reach definitive conclusions about one instance of an industrial cluster, of 

course. One fact contradicting the hypothesis of free mobility is that high-tech firms in Silicon 

Valley have been alleged to collude to suppress wages and reduce “poaching.”39 We do not 

know precisely how this behavior interacts with use of non-competes; in other words, the 

California firms may have been colluding as a substitute for using non-competes. Nevertheless, 

the Silicon Valley example highlights the importance of information sharing facilitated by

worker mobility in some industrial clusters.

 38 For example, see Gilson (1999).

39 See http://www.wsj.com/articles/judge-rejects-settlement-in-silicon-valley-wage-case-1407528633.
23

Singh and Marx look more broadly at informational spillovers and find that non-compete 

enforcement reduces their scope. Furthermore, using the Michigan natural experiment and crosssectional data, Marx, Singh, and Fleming find that highly skilled workers tend to move from 

enforcing to non-enforcing states. This suggests that non-competes play a role in “brain drain,” 

potentially harming states that enforce non-competes more stringently.40 

Samila and Sorenson (2011) also examine the relationship between non-compete enforcement 

and regional employment and entrepreneurship. They find that more stringent enforcement is 

negatively related to both employment growth and entrepreneurship, consistent with results from 

Marx and coauthors. 

 40 See Singh and Marx (2011) and Marx, Singh, and Fleming (2011). Note that this particular finding does not 

speak to whether strict non-compete enforcement is harmful to the nation as a whole. 
24

V. Directions for Reform

Until recently, the lack of comprehensive data and analysis of non-competes made it difficult to 

evaluate the institution from a public policy perspective. However, recent research has 

underlined some important stylized facts that help to inform ideal policy and distinguish between 

various possible explanations for non-competes. First, non-competes are common in the labor 

market across educational, occupational, and income groups. Many workers who do not report 

possessing trade secrets are nonetheless covered by non-competes.41 Second, workers are often 

poorly informed about the existence and details of their non-competes, as well the relevant legal 

implications. Some employers appear to be exploiting this lack of understanding in ways that

harm workers without producing corresponding benefits to society. Finally, while non-compete

enforcement is associated with increased training for some workers, the details of this 

enforcement are important: strong “consideration” requirements can support training and wage 

growth while diminishing the likelihood that non-compete contracts result purely from 

inadequate worker knowledge. 

The following are general reform recommendations related to the enforcement and use of noncompete contracts. They are not intended to be detailed or exhaustive. Nonetheless, these are 

promising avenues for state and/or federal policymakers to explore. 

Increase transparency in the offering of non-competes.

Policymakers should act to inject transparency into the world of non-competes. To the extent 

that firms are simply misleading their prospective workers, non-competes are straightforwardly 

negative for employees. It is important to be precise about the forms that worker confusion can 

take. Some workers may simply not realize that they have signed a non-compete or fail to 

understand its ramifications. This sort of confusion could be addressed by a requirement that 

employers make the contracts, as well as their implications for future mobility, more salient for 

workers at the outset of an employment relationship. Relatedly, some workers who are aware of 

their non-compete contract may nonetheless be confused about its legal enforceability. 

 41 It is worth noting, however, that this is based on worker self-reports; employers may disagree. 
25

Encourage employers to use enforceable non-compete contracts.

Many firms write non-compete contracts that contain unenforceable, overbroad provisions. 

Given the well-documented worker confusion about these contracts and the very low cost of 

writing an unenforceable contract, employers can exert a chilling effect on worker behavior even 

when their contracts are unenforceable. Conversely, states should explicitly specify the 

constraints on enforceability of non-compete contracts, where possible. 

Require that firms provide “consideration” to workers bound by non-compete contracts in 

exchange for both signing and abiding by non-competes.

Some firms already provide severance payments to workers with non-competes.

42 For instance, 

a worker who quits may receive 50 percent of her previous salary in exchange for abiding by the

terms of the non-compete. This limits the harm to workers while ensuring that firms retain the 

ability to protect their interests with non-competes. Importantly, by requiring that firms incur a 

cost when requesting a non-compete, this policy preserves the most socially valuable noncompete agreements and discourages the least valuable, for which firms would not be willing to 

pay. 

Conclusion

Non-competes are a central labor market institution, with nearly one fifth of all American 

workers currently bound by such a contract. Surprisingly, non-competes are widely distributed 

across education, occupation, and income groups. Understanding the consequences of this 

institution for workers and the broader economy is therefore of great importance, especially in 

light of its central role in determining workers’ prospects for wage growth and job mobility. 

 42 See http://www.sec.gov/Archives/edgar/data/320187/000119312510161874/dex1023.htm. 
26

Though non-compete contracts can have important social benefits, principally related to the 

protection of trade secrets, a growing body of evidence suggests that they are frequently used in 

ways that are inimical to the interests of workers and the broader economy. Enhancing the 

transparency of non-competes, better aligning them with legitimate social purposes like 

protection of trade secrets, and instituting minimal worker protections can all help to ensure that 

non-compete contracts contribute to economic growth without unduly burdening workers.

Ryan Nunn in the Office of Economic Policy was the principal drafter of this report. Inquiries

should be directed to the Office of Economic Policy at (202) 622-2200.
27

Appendix A

Modern interpretations of non-compete agreements are often said to have their origin in 

15th and 16th century English common law and are best understood in the context of that period’s 

economic structure. The guild economy largely comprised three types of workers: the 

apprentice, the journeyman, and the master craftsman. Custom required apprentices to train 

under master craftsmen for an extended period until graduating to the status of journeyman. 

Once a journeyman, the individual was free to work wherever he wished while he sought 

entrance into the inner circle of master craftsmen. Non-compete agreements likely originated in 

this context as journeymen replaced retiring master craftsmen by purchasing their businesses.43 

However, available case law suggests English courts tended to disfavor restraints on trade –

especially restraints initiated by an employer. 

The most cited example from this period comes from The Dyer’s Case of 1414.

44 This 

case is perhaps the first known example of a contractual restraint of trade. A London practitioner 

prohibited his apprentice from pursuing his trade in the same city for six months following his 

apprenticeship. The court ruled against the covenant.45 According to some commentators, the

result produced two fundamental pillars of employment law.46 The first was a policy in favor of 

retaining skilled labor in the public domain. The second pillar promoted the right of all 

individuals to seek a livelihood. These principles guided legal precedent for the next century. 

Over time, some master craftsmen began to take on more apprentices than customary so 

as to employ a larger staff at low cost.47 The consequence of this strategy was an influx of 

journeymen looking for ways to unseat master craftsmen. Some craftsmen addressed the 

increased levels of competition by requiring apprentices and journeymen to sign non-compete 

agreements.48 The English Parliament brought attention to some of these practices in 1536 by 

authoring the Act for Avoiding of Extracting Taken upon Apprentices.

49 The law attempted to 

 43 Harlan M. Blake, Employee Agreements Not to Compete, 73 Harvard Law Review 638 (1960). 44 The Dyer’s Case, Y.B. Mich. 2 Hen. 5, fol. 5, pl. 26 (1414). 45 Ibid. 46 Dan Messeloff, Giving the Green Light to Silicon Alley Employees: No-Compete Agreements between Internet 

Companies and Employees under New York Law, Fordham Intellectual Property, Media and Entertainment Law 

Journal, (vol. 11, issue 3, 2001), at 710-711. Much of this appendix benefits from this article. 47 Blake, supra note 39, at 633. 48 Ibid.

49 Bland, Brown & Tawney, English Economic History – Select Documents, (1919), at 284-286.
28

restrain some of the practices of guild masters – including non-compete contracts. In 1563, the 

Statute of Artificers restricted the privileges of workers while also shifting power from guild 

masters to the evolving English state.50 The law established national constraints on maximum 

wages and the length of apprenticeships.51

By the beginning of the 17th century, courts continued to disfavor employment restraints, 

whether in the form of time or place. An excerpt from Colgate v. Bacheler (1602) notes, “For as 

well as [employers] may restrain [employees] for one time, or one place, [they] may restrain 

[them] for longer times, and more places, which is against the benefit of the Common-wealth.... 

For he ought not be abridged of his Trade, and Living.”52 Others worried that non-compete 

covenants forced young men into “idleness”.53 However, as a new economic system emerged, 

English courts began to rethink their position on non-compete covenants. 

Mitchel v. Reynolds (1711) marked a distinct shift away from the practice of completely 

banning non-competes. 54 Reynolds, a baker, agreed to rent his bakery for five years. In return, 

Mitchel pledged Reynolds a bond worth 50 pounds on the condition that Reynolds would not 

resume his trade within St. Andrew Holborn Parish for 5 years. The latter failed to keep the 

agreement and Mitchel sued. Chief Justice Parker ruled in favor of the agreement. 55 He 

reasoned that while general restraints on trade were unlawful, as they benefited neither party, 

some partial restraints were reasonable.56 Effectively, the ruling permitted individuals to enter 

agreements even if they restricted one’s ability to work in a particular location or for a certain 

period, as long as both parties and the affected communities benefited from the arrangement. 

However, employers were required to demonstrate the economic necessity of any such 

agreement. 

 50 Donald Woodward, The Background to the Statute of Artificers: The Genesis of Labour Policy, 1558-63, The 

Economic History Review (vol. 33, no.1) 1980, at 32-44. 51 Ibid. 52 Cro. Eliz. 872, 78 English Report 1097, (Queen’s Bench 1602). 53 Case of Tailors of Ipswich, 77 English Report 1218, 1219 (King’s Bench 1614). 54 Mitchel v. Reynolds, 24 English Report 347 (Queen’s Bench 1711). 55 Dan Messeloff, Giving the Green Light to Silicon Alley Employees: No-Compete Agreements between Internet 

Companies and Employees under New York Law, Fordham Intellectual Property, Media and Entertainment Law 

Journal, (vol. 11, issue 3, 2001), at 710-711. 56 “General” restraints were defined as those with unlimited scope in either time or space, while “partial” restrains 

were those limited in both dimensions. 
29

The economic significance of non-competes evolved as new technology accompanied the 

Industrial Revolution.57 Once limited to local markets, companies began expanding into national 

and international markets, exposing themselves to new rivals.58 Moreover, corporations were 

increasingly concerned with worker mobility. Leaving one’s town no longer carried the same 

economic and physical risks. Homer v. Ashford (1825) describes the logic applied by English 

courts on matters of non-compete covenants:

A merchant or manufacture would soon find a rival in every one of his 

servants if he could not prevent them from using to his prejudice the 

knowledge they acquired in his employ. Engagements of this sort between 

masters and servants are not injurious restraints of trade, but securities 

necessary for those who engage in it. The effect of such contracts is to 

encourage rather than cramp the employment of capital in trade and the 

promotion of industry.59

Some took the argument of the court to suggest that non-compete clauses were 

permissible in most circumstances. Six years later, the court clarified that while employers 

should have access to protection, Mitchel’s test-of-reason still applied. In Horner v. Graves

(1831), a dentist’s assistant contracted to not practice independently within 100 miles of the 

original employer.60 Soon after parting with his employer, the assistant broke the agreement, 

prompting the dentist to sue. In response, the court sided with the defendant, explaining that a 

reasonable restraint must also account for the interests of the public. From the public’s 

perspective, the dentist had sought to withhold a valuable service within the 100 mile radius of 

his practice in order to protect himself. The court determined that the burden placed on the 

public was greater than the need to protect the interests of the previous employer and that the 

requirement was unreasonably broad.

61

The intermittent reweighting of employer, worker, and public interests continued as the 

19th century wore on. By 1841, although most English courts still rejected general restraints, 

some began to enforce them as businesses globalized.

62 A trend toward pro-employer policy 

 57 See Messeloff, supra note 42, at 712-713. 58 Blake, supra note 39, at 638.

59 Homer v. Ashford, 3 Bing. 322, 327 (1825). 60 7 Bing. 735, 131 English Report 284 (C.P. 1831). 61 Ibid. at 743. 62 Blake, supra note 39, at 624.
30

continued in 1853 when the Queen’s Bench ruled that the burden of showing unreasonableness 

rested on the employee rather than employer.

63 In 1875, the court ruled that while contracts must 

remain reasonable, a central value of the liberal economic philosophy permitted men of sound 

mind to enter arrangements as they saw fit.64 Increasing emphasis on freedom of contract was 

evident in Rousillon v. Rousillon (1880), where the court allowed covenantal protection to extend 

beyond national borders. The court reasoned that if the contract was reasonable in scope at the 

negotiation, changing economic circumstances should not bar enforcement.65,66

As English courts were moving toward pro-employer policies, American courts started 

developing their own body of common law. In 1851, Lawrence v. Kidder, a case before the New 

York Supreme Court, established a precedent that the state’s priority was to deter 

monopolies.67,68 The court reasoned that as far as possible, the state must ensure that all citizens 

be permitted to work.

69 As such, the court viewed agreements which barred individuals from 

practicing their occupations based on state or territory boundaries as unlawful.

A Pennsylvania court made an important distinction in 1866 between the sale of 

“handicraft” and the sale of “property”.70 The Pennsylvania court deemed restrictions on

property much more reasonable than restrictions on the use of an employee’s skills. This 

distinction laid the foundation for the landmark Supreme Court decision in Oregon Steam 

Navigation Co. v. Winsor (1874).71 The California Steam Navigation Company sold the Oregon 

Steam Navigation Company a boat under the condition that they would not operate the vessel

within California for a period of ten years. The Oregon Steam Navigation Company 

subsequently sold it to Winsor, who at the time of sale was engaged in the navigation of water in 

Washington. The sale was subject to a condition (among others) that Winsor would not operate 

the boat in California for a period of ten years. The court upheld the condition, noting that there 

was no injury to the public.

72

 63 Tallis v. Tallis, I El. & B. 391, 118 English Report 482 (Queen’s Bench 1853). 64 Printing & Numerical Registering Co. v. Sampson, L.R. 19 Eq. 462 (1875). 65 14 Ch. D. 351 (1880). 66 Blake, supra note 39, at 641. 67 10 Barb. 641 (N.Y. Supreme Court 1851) 68 Blake, supra note 39, at 644. 69 Ibid. 70 Keeler v. Taylor, 53 Pa. 467, 470 (1866). 71 Messeloff, supra note 42, at 720-721. 72 Ibid.
31

The New York Court of Appeals echoed the opinion of the Supreme Court in 1887 when 

it ruled in favor of a non-compete clause which restricted selling matches in the states of Nevada 

and Montana.73 The court found that the condition was a “partial” restraint even though it 

covered the entire state of New York, while noting that the distinction between “general” and 

“partial” restraints, while still good law, was weakening.

74

Non-compete policies began diverging across states by the end of the 19th century. 

Notably, the California legislature rendered non-competes generally unenforceable.

75 Outside of 

legal opinions, the most influential American documents on contract law are the “Restatement of 

Contracts” of 1932 and its revision in 1979.76 Though non-binding, these writings, published by 

the American Law Institute, codify case law. Both versions of the Restatement of Contracts state 

that restraints are unlawful if they unjustly benefit employers and impose undue hardship on the 

employee or public – reflecting the opinion in Horner v. Graves.

77 The second Restatement of 

Contracts protects the employee further by increasing the standard by which an employer must 

demonstrate legitimate need for non-compete protection.

78

 73 Diamond Match v. Roeber 106 N.Y. 473 (1887). 74 Messeloff, supra note 42, at 722. 75 Messeloff, supra note 42, at 714. 76 Ibid. at 723-724. 77 Ibid. 78 Ibid.
32

Appendix B

The following figures show some of the state heterogeneity in non-compete enforcement as of 

2015. Note, however, that they reflect one particular expert’s view of state law, and may elide 

distinctions relevant to some specific cases.79 

 79 Hawaii considers trade secrets to be a protectable interest, is undecided on the question of enforcement against 

workers fired without cause, and regards continued employment as sufficient consideration. Alaska is identical, 

with the exception that it is undecided as to whether continued employment constitutes sufficient consideration. 

Not applicable

Not protectable

Protectable

Source: A State by State Survey of Employee Noncompetes, Beck Reed Riden

Trade Secrets as Legitimate Interests

Not applicable

Undecided

Not enforceable

Enforceable

Source: A State by State Survey of Employee Non-competes, Beck Reed Riden

Enforceable Against Workers Fired Without Cause
33

Not applicable

Undecided

Not sufficient consideration

Sufficient consideration

Source: A State by State Survey of Employee Noncompetes, Beck Reed Riden

Continued Employment as Sufficient Consideration
34

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