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Does Enforcement of Employee Noncompete Agreements Impede the Development of Industry Clusters?

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  • David A. Price

Abstract

Employee noncompete agreements are widespread among technical workers and managers in technology companies. Policies regarding the enforcement of these agreements vary among states, however. The rise of the technology industry cluster in Silicon Valley and the car industry cluster in the Detroit region occurred during periods when California and Michigan courts did not enforce noncompete agreements. Research has sought to determine the extent to which enforcement of noncompetes may suppress the formation of industry clusters by restricting labor mobility and entrepreneurship.

Suggested Citation

  • David A. Price, 2014. "Does Enforcement of Employee Noncompete Agreements Impede the Development of Industry Clusters?," Richmond Fed Economic Brief, Federal Reserve Bank of Richmond, issue Nov.
    • Handle: RePEc:fip:fedreb:00021
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