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Friday, March 01, 2019

Gentlemen Prefer Bonds: How Employers Fix the Talent Market

That's the title of the paper I am presenting today at a terrific conference in Santa Clara University. The Symposium is called Antitrust and Silicon Valley: New Themes and Directions in Competition Law and Policy and the articles will be published in the Santa Clara Law Review.

The title of my article is a play on the fact the no-hire agreements between tech giants in Silicon Valley which were deemed per se antitrust violations and resulted in large class action settlements have been referred to as "gentlemen agreements" - they were orchestrated from the very top - CEO level collusion between Steve Jobs, Eric Schmidt and several other tech leaders. But the play on this "gentlemen" term also refers to something I develop in the paper - a gender effect of restraints on trade. The paper argues that beyond the horizontal do-not-poach agreements, and beyond the formal language of vertical noncompetes between employers and employees, both of which I have thought about a lot in Talent Wants to be Free and several other articles here and here and here for example, there is a spectrum of contractual restraints on trade - employee and customer non-solicit, broad ndas, that are designed to prevent employee mobility and impede competition. So the first goal of the article is to explain the broader landscape of anti-competitive restrictions that are routinely required of employees. Second, while many of the harms of noncompetes are well documented, the article presents a neglected aspect of labor market concentration: stagnating gender and wage gaps and persistent inequalities. Third, the article presents an additional problem in the landscape of noncompete law: the pervasiveness of unenforceable contractual terms. The article argues that the problem of unenforceable anti-competitive restrictions in employment contracts calls for a proactive approach to unenforceable contracts, including notice requirements in employment contracts and penalties that target the contracts before litigation has been pursued.

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Posted by Orly Lobel on March 1, 2019 at 02:52 PM | Permalink

Comments

Also probably a concentration of wealth effect due to privilege of those that have a financial fall cushion to ride out the process, or a rich uncle to pay for some legal letters back to their prior employers who sue them. (or even the social network and knowledge of parents friends from multi-generational professional families)

All you bring up is true, but the difficulty becomes a break point cusp barrier, not just a headwind effecting some slightly more or less than others with an even distribution of effects.

Posted by: Mike | Mar 3, 2019 6:44:10 PM

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