Covenants Not to Compete in a Knowledge Economy: Balancing Innovation from Employee Mobility Against Legal Protection for Human Capital Investment

38 Pages Posted: 15 May 2013

See all articles by Norman Bishara

Norman Bishara

The Stephen M. Ross School of Business at the University of Michigan

Date Written: 2006

Abstract

This Article examines a specific policy issue that goes to the heart of the larger debate surrounding the changing employment relationship: How should the law of covenants not to compete adapt to the changing landscape of the U.S. labor market and to the increasing importance of a knowledge-based economy? The author first argues that noncompete policy is of great importance to fostering economic growth and labor markets, and then discusses various theoretical approaches to noncompete enforcement in a knowledge economy. The preferred approach, the author contends, is a hybrid model of selective enforcement that differentiates among workers as “creative” or “service” employees, thereby enhancing the positive spillovers gained from policies at the extremes of the enforcement spectrum.

Suggested Citation

Bishara, Norman D, Covenants Not to Compete in a Knowledge Economy: Balancing Innovation from Employee Mobility Against Legal Protection for Human Capital Investment (2006). Berkeley Journal of Employment and Labor Law, Vol. 27, No. 2, 2006, Ross School of Business Paper No. 1187, Available at SSRN: https://ssrn.com/abstract=2264964

Norman D Bishara (Contact Author)

The Stephen M. Ross School of Business at the University of Michigan ( email )

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Ann Arbor, MI MI 48109
United States
734-647-6823 (Phone)

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