Law Commons^™

An Empirical Analysis Of Noncompetition Clauses And Other Restrictive Postemployment Covenants, Randall Thomas

Vanderbilt Law School Faculty Publications

Employment contracts for most employees are not publicly available, leaving researchers to speculate about whether they contain postemployment restrictions on employee mobility, and if so, what those provisions look like. Using a large sample of publicly available CEO employment contracts, we are able to examine these noncompetition covenants, including postemployment covenants not to compete ("CNCs" or "noncompetes'), nonsolicitation agreements ("NSAs"), and nondisclosure agreements ("NDAs'). What we found confirms some long-held assumptions about restrictive covenants but also uncovers some surprises.

We begin by discussing why employers use restrictive covenants and examining how the courts have treated them. We then analyze an …