A Valuation Model For Covenants Not To Compete

Tax aspects of covenants not to compete.

Covenants not to Compete, Labor Mobility, and Industry Dynamics

Conventional wisdom among legal scholars is that contractual restrictions on employee mobility a¤ect turnover and led to the overtaking of Massachusetts’Route 128 by Silicon Valley. We study a model of employee mobility in the spirit of Pakes and Nitzan (1984) to see when this can be the case. We show that, in fact, with certain frictions taken into account, a model of employee mobility can not...

Patenting and the Varying Enforcement of Covenants Not to Compete : A Comparative

History demonstrates that the numerous factors determining which paths technologically innovative industrial clusters follow often fall into place serendipitously. Paul Krugman notes, “given a slightly different sequence of events, Silicon Valley might have been in Los Angeles, Massachusetts, or even Oxfordshire.” Not surprisingly, advantageous circumstances rather than carefully premeditated p...

Locked In? The Enforceability of Covenants Not to Compete and the Careers of High-Tech Workers

The research program of the Center for Economic Studies (CES) produces a wide range of economic analyses to improve the statistical programs of the U.S. Census Bureau. Many of these analyses take the form of CES research papers. The papers have not undergone the review accorded Census Bureau publications and no endorsement should be inferred. Any opinions and conclusions expressed herein are th...

Enforcing Covenants Not to Compete: The Life-Cycle Impact on New Firms∗†

We examine the impact of enforcing non-compete covenants (CNC) on the formation and performance of new firms using matched employer-employee data on 30 US states. To identify the impact of CNC, we exploit the inter-state variation in CNC enforcement along with the fact that courts do not enforce such covenants between law firms and departing lawyers in any state. Using a difference-in-differenc...