Table of Contents

Research Handbook on the Economics of Labor and Employment Law

Research Handbook on the Economics of Labor and Employment Law

Research Handbooks in Law and Economics series

Edited by Cynthia L. Estlund and Michael L. Wachter

This Research Handbook assembles the original work of leading legal and economic scholars, working in a variety of traditions and methodologies, on the economic analysis of labor and employment law. In addition to surveying the current state of the art on the economics of labor markets and employment relations, the volume’s 16 chapters assess aspects of traditional labor law and union organizing, the law governing the employment contract and termination of employment, employment discrimination and other employer mandates, restrictions on employee mobility, and the forum and remedies for labor and employment claims.

Chapter 12: Intellectual property justifications for restricting employee mobility: a critical appraisal in light of the economic evidence

Alan Hyde

Subjects: economics and finance, labour economics, law and economics, law - academic, law and economics


An employee of Employer 1 proposes to quit his or her job and either go to work for a competing employer in the same industry (Employer 2) or to found his or her rival company. Employer 1 wishes to prevent this. May it do so or plausibly threaten litigation that might slow or discourage the employee’s moving to a rival? In many cases, the answer is yes. Lawyers for Employer 1 will study at least the following five legal theories, which, as applied to this scenario, comprise the subject of this chapter: 1. Duty of loyalty. Every state implies a duty of loyalty running from incumbent employees to their current employer. While an employee may make “preparations” to join or start a rival, the employee may not, while on Employer 1’s payroll, “solicit” customers or fellow employees for the new venture or divert opportunities from Employer 1. 2. Patent or copyright infringement. Employee might be sued for infringement if his or her duties at Employer 2 threaten to make use of Employer 1’s patents or copyrights. 3. Trade secrets. Every state imposes a duty on employees and former employees not to disclose trade secrets, a very broad category, of their former employer. 4. Noncompete (or covenant not to compete). Most states enforce “reasonable” covenants by employees not to compete with their former employer.

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.

Further information