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Transactional M&A Corporate Attorney

Consider the example of a chef who, reluctant to share recipes with an underling, insisted on doing all the work themselves. If the chef did share their recipes, what’s to prevent the worker from taking that knowledge to a new restaurant? Noncompetes address that problem by banning the observable, detectable action of going to work at a similar firm. This has made noncompetes a very desirable tool for companies where the so-called “secret sauce” involves particularly sensitive information or distinctive practices. And in the absence of noncompetes, companies may be far less willing to share knowledge with their workers. This will come at a cost to the companies, of course. But it could also come at a cost to workers, limiting their on-the-job training. “Banning them will tend to make workers less productive,” Hubbard says, “because people aren’t going to tell them much, which would ultimately hurt their earning potential.”

Could This Be the End of Noncompetes?

Could This Be the End of Noncompetes?

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