Testifying in support of SB 906: AN ACT CONCERNING NON-COMPETES

Abstract

Noncompetes have a harmful effect on job mobility, wages, competition, entrepreneurship, and equality. They restrict employees from switching employers or starting their own competing business. Those restrictions depress wages, reduce entrepreneurship, and impede efforts to correct inequities. In the past decade, a wealth of research—empirical, experimental, and theoretical studies—offers evidence about the key role that human capital policy, including noncompete contracts, plays in industries and regions. Research on the question of labor market mobility has taken multiple forms: longitudinal studies, comparative regional studies, patent network mapping, surveys, behavioral lab experiments, ethnographies, simulations, and modeling.

Keywords: noncompetes, job mobility, wages, competition, entrepreneurship, equality, labor, testimony

JEL Classification: K22, K31, K12