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USD School of Law Professor Orly Lobel Research Impacts White House Call to Action

Professor Orly Lobel Research Impacts White House Call to Action

In August of 2016, University of San Diego (USD) School of Law Professor Orly Lobel was invited to the White House to present her research on non-compete restrictions. Since then, Lobel has served as a member of a White House working group to put together the call to action announced October 25 by the Obama Administration to push back against the over-expansion of non-competes and others practices, including collusive agreements to not poach employees and anti-competitive wage fixing.

The call to action was based in part on Lobel's research and book, Talent Wants to Be Free (Yale University Press), which argues that the spread of post-employment restrictions in the labor market not only hurts workers but also innovation and economic growth more broadly. 

"My research has shown that non-competes decrease employee motivation and performance, reduce talent mobility and knowledge flow in creative industries and have an overall harmful effect on entrepreneurship and regional development," says Professor Lobel. "I am very pleased that the White House is urging states to enact reforms to reduce the prevalence of non-compete agreements that are hurting workers and regional economies. In addition, the Department of Justice and the Federal Trade Commission announced that going forward DOJ will criminally investigate allegations that employers have agreed amongst themselves on employee compensation or not to solicit or hire one another's employees. This is an important warning to companies that have anti-competitive gentlemen's agreements to no recruit each other's talent."

In the press release, the White House States the call for action will enhance competitions to benefit consumers, workers, and entrepreneurs. Beyond the recommendation of banning non-competes' for most workers, the White House call for action urges states to improve transparency and fairness of non-compete agreements by, for example, disallowing non-competes unless they are proposed before a job offer or significant promotion has been accepted and provide consideration over and above continued employment. 

Read the press release online.