Good Work If You Can Get It...Again: Non-Compete Agreements, Occupational Detours, and Attainment

Abstract:     

In this multi-method study, I explore how the institutional sanction of employment contracts shapes the process of individual attainment. In particular, I examine the implications of employee non-compete agreements, which are ostensibly used to protect trade secrets. Field data from interviews and a survey reveal that individuals respond to such post-employment restraints by taking “occupational detours” in order to avoid violating the non-compete, or by “seeking shelter” with large firms who can reliably indemnify those at risk of legal action. These constructs are subsequently verified using large-sample analysis that exploits an inadvertent reversal of non-compete enforcement policy in Michigan. The results advance our understanding of how individual attainment is shaped by institutional factors, fill a gap in the intellectual property literature regarding trade secrecy, and identify mechanisms by which the state may (unwittingly) deter entrepreneurial activity.

Number of Pages in PDF File: 75

Keywords: intellectual property, trade secrets, non-competes, knowledge workers