Noncompete clauses are a standard feature of many employment contracts. Surveys show that in the United States nearly half of engineers have signed agreements limiting their ability to later work for or start rival firms, as have senior managers at 70% of public companies. According to conventional wisdom, these agreements are crucial to innovation-driven businesses, […]
Buy Copies Buy CopiesNoncompete clauses are a standard feature of many employment contracts. Surveys show that in the United States nearly half of engineers have signed agreements limiting their ability to later work for or start rival firms, as have senior managers at 70% of public companies. According to conventional wisdom, these agreements are crucial to innovation-driven businesses, because they help keep proprietary information and talent safe from the competition.
A version of this article appeared in the January–February 2014 issue of Harvard Business Review. Read more on Negotiation strategies or related topic Motivating people On Amir is an associate professor of marketing at the University of California at San Diego.Orly Lobel is the Warren Distinguished Professor and director of the Center for Employment and Labor Policy (CELP) at University of San Diego and author of The Equality Machine: Harnessing Digital Technology for a Brighter, More Inclusive Future (PublicAffairs), Talent Wants to be Free Why We Should Learn to Love Leaks, Raids and Free-Riding (Yale Press), and You Don’t Own Me (Norton).