Intellectual Property and Restrictive Covenants

This chapter, for the forthcoming Encyclopedia of Labor and Employment Law and Economics, provides an overview of legal and economic analysis of contractual and regulatory constraints on the use of knowledge, skill and information acquired during the employment relationship. Three interrelated areas of employment regulation are discussed: (1) Covenants not-to-compete; (2) trade secrets and non-disclosure agreements; and (3) employee inventions, including pre-invention patent assignment agreements. Drawing both on theoretical literature and empirical analyses of different parts of the labor market, the chapter considers the effects of employment-based intellectual property ('EIP') law on market innovation and mobility and analyses recent studies of high velocity markets in relation to EIP law