Noncompetes and Employee Mobility

Monday, March 18, 2019 - 12:30 to 14:00

Farris Hall, Rm 106

We study the relationship between employment noncompetition agreements and employee mobility using nationally representative data on 11,500 labor force participants from the 2014 Noncompete Survey Project. We find that those bound by noncompetes exhibit 11% longer tenures and are more likely to report that they will leave for a position with a noncompetitor relative to a position with a competitor. Perhaps surprisingly, we find that these patterns are statistically indistinguishable across states whether they do or do not enforce noncompetes. Decomposing mobility into its constituent subprocesses, we find no evidence that employees bound by noncompetes receive less recruitment attention from or expend less effort searching for positions at competitors, and they appear distinctly more mobile on these measures with respect to noncompetitors. Nevertheless, we discover that approximately 40% of noncompete signers who have turned down an offer from a competitor cite their noncompete as a factor in their decision—in both enforcing and nonenforcing states. Finally, we document that individuals who believe that their employer will sue them over the violation of a noncompete, who believe that a court will enforce their noncompete, or who have been reminded of their noncompete by their employer are more likely to cite their noncompete as a factor when turning down competitor offers, whereas we find no evidence that actual enforceability is a deterrent.

J. J. Prescott
Professor of Law, University of Michigan

J. J. Prescott's research interests revolve around criminal law, sentencing law and reform, employment law, and the dynamics of civil litigation, particularly settlement. Professor Prescott is the principal investigator of the U-M Online Court Project, which uses technology to help people facing warrants, fines, and minor charges resolve their disputes with the government and courts online and without the need to hire an attorney. Professor Prescott earned his JD, magna cum laude, in 2002 from Harvard Law School, where he was the treasurer (Vol. 115) and an editor of the Harvard Law Review. After clerking for the Hon. Merrick B. Garland on the U.S. Court of Appeals, District of Columbia Circuit, he went on to earn a PhD in economics from the Massachusetts Institute of Technology in 2006.

Please RSVP to hughes@allard.ubc.ca.

This course is eligible for one hour of Continuing Professional Development credit. 

For further information, contact Professor Wei Cui at cui@allard.ubc.ca