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Labor and Employment Law

University of Washington School of Law

Covenants-not-to-compete

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Leaky Covenants-Not-To-Compete As The Legal Infrastructure For Innovation, Robert W. Gomulkiewicz Jan 2015

Leaky Covenants-Not-To-Compete As The Legal Infrastructure For Innovation, Robert W. Gomulkiewicz

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The flow of information that naturally occurs when employees change firms plays a vital role in spurring innovation. Numerous law review articles have explored how covenants-not-to-compete (“non-competes”) can impede this important information flow. In 1999 Professor Ronald Gilson published an influential article concluding that California’s ban on non-competes led to the rise of California’s Silicon Valley and the comparative decline of Massachusetts’ high technology corridor known as Route 128. Despite the scholarly praise for California’s approach, most states enforce non-competes that are reasonable.

That may change, however, because many states are re-evaluating their non-compete laws to avoid ...