(Kaitlyn Beukema)
High-tech employees working in states that enforce noncompete agreements suffer for it in lower wages and reduced job mobility. Jagadeesh Sivadasan, an associate professor of business economics and public policy at the Ross School of Business, compared data for workers in states that strongly enforce noncompete clauses with those that do not. “Companies use noncompete agreements to protect their intellectual capital, but we find statistically significant effects for lower wages and lower mobility, meaning they stay in a given job longer,” Sivadasan said. Sivadasan and his co-authors analyzed individual worker-level data from the U.S. Census Bureau, which collects it from states. They then ranked each state according to how strongly it enforces noncompete agreements, drawing on work by Norman Bishara, U-M professor of business law and ethics.
