The Antitrust Challenge to Covenants Not to Compete in Employment Contracts

28 Pages Posted: 23 Sep 2019

See all articles by Eric A. Posner

Eric A. Posner

University of Chicago - Law School

Date Written: September 13, 2019

Abstract

Employee covenants not to compete bar workers who leave their jobs from working for a competing employer for a period of time. The common law regards noncompetes as restraints of trade and imposes a “reasonableness” standard on them; they can also be challenged under the antitrust laws. But new research suggests firms frequently abuse noncompetes, causing significant harm to workers and to the economy. The existing legal approach is inadequate because the common law offers minimal sanctions and antitrust law imposes excessive burdens of proof on plaintiffs. While antitrust law is the appropriate vehicle for challenging noncompetes because of its focus on market effects, it needs to be strengthened.

Keywords: noncompetes; antitrust

JEL Classification: K12, K31

Suggested Citation

Posner, Eric A., The Antitrust Challenge to Covenants Not to Compete in Employment Contracts (September 13, 2019). Available at SSRN: https://ssrn.com/abstract=3453433 or http://dx.doi.org/10.2139/ssrn.3453433

Eric A. Posner (Contact Author)

University of Chicago - Law School ( email )

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