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 …

Arbitration Clauses In Ceo Employment Contracts: An Empirical And Theoretical Analysis, Randall Thomas, Kenneth J. Martin, Erin O'Connor

Vanderbilt Law School Faculty Publications

A bill currently pending in Congress would render unenforceable mandatory arbitration clauses in all employment contracts. Some perceive these provisions as employer efforts to deprive employees of important legal rights. Company CEOs are firm employees, and, unlike most other firm employees, they can actually negotiate their employment contracts, very often with attorney assistance. Moreover, many CEO employment contracts are publicly available, so they can be examined empirically. In this paper, we ask whether CEOs bargain to include binding arbitration provisions in their employment contracts. After exploring the theoretical arguments for and against including such provisions in these agreements, we use …

An Empirical Analysis Of Ceo Employment Contracts: What Do Top Executives Bargain For?, Randall Thomas, Stewart J. Schwab

Vanderbilt Law School Faculty Publications

In this paper, we examine the key legal characteristics of 375 employment contracts between some of the largest 1500 public corporations and their Chief Executive Officers. We look at the actual language of these contracts, asking whether and in what ways CEO contracts differ from what are thought of as standard employment contract features for other workers. Our data provide some empirical answers to several common assertions or speculations about CEO contracts, and shed light on whether these contracts are negotiated solely to suit the preferences of CEOs or have provisions that insure that the employers' interests are also safeguarded. …