In their recent article “A Review of the Economic Evidence on Noncompete Agreements” published by Competition Policy International (CPI), NERA Directors Dr. Kate Foreman and Dr. Gabriella Monahova examine recent economic research on noncompete agreements. 

The authors’ findings suggest noncompete agreements have advantages and disadvantages. Noncompete agreements can protect trade secrets and encourage investment in employee training but may also restrict worker leverage, impede career mobility, and harm competition. Moreover, the relationship between enforceable noncompetes, reduced wages, and limited mobility is complex and context-dependent. When assessing the potential impact of a complete ban on noncompete agreements, these factors should be considered. The appropriateness of such a ban varies and requires research to determine the best approach to noncompete agreements.