Devil is often in detail when it comes to employee contracts via IrishTimesBiz
The story starts in the US, where economists and law professors such as Evan Starr and Orly Lobel have mapped out the extent to which employment clauses traditionally associated with top executives have actually spread across the workforce. Non-disclosure agreements; non-disparagement clauses; non-compete clauses – many American workers are now tangled in a thicket of the stuff.
The argument in favour of non-compete clauses is that they incentivise employers to innovate and train workers, because they know their investments will be protected. If an employee could just go straight to a competitor, why bother training them in the first place?People on this side of the argument concede that some companies apply overly restrictive non-competes to workers who don’t have valuable trade secrets or training.
A number of studies do suggest that such clauses depress labour mobility and wages. When Hawaii banned non-competes for technology workers, researchers found that worker mobility increased by 11 per cent and wages for new hires rose 4 per cent.Non-competes seem to make life harder for young start-ups too: another study found that in US states where non-competes were more enforceable, new companies were more likely to die and even those that survived stayed smaller in their first five years.
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