George Mason University School of Law
A growing body of evidence has highlighted the human and economic costs associated with contractual restrictions on employee mobility. News accounts describe abusive use of non-compete clauses to prevent low wage workers from seeking better options. Economists, meanwhile, have demonstrated that innovation and economic dynamism may suffer when employers can easily prevent their employees from changing jobs. While state legislatures have attempted to address these concerns by restricting employers' use of non-compete agreements, the Federal Trade Commission recently announced a plan to prohibit them altogether. As policymakers focus attention on contractual limits on employment mobility, however, a more insidious threat to employee mobility has flown below the radar. Trade secret law's inevitable Disclosure Doctrine ("IDD") comes in many shapes and sizes, but at its most extreme, it empowers courts to enter employment-blocking injunctions based on the threat that an employee will use her former employer's secrets in her new job. In jurisdictions that adopt this version of the doctrine, employees exposed to trade secrets face the risk of a lawsuit if they leave to work for a competitor. Even in states that use the doctrine more sparingly, its definitional ambiguity increases the uncertainty and cost of job transitions, which in turn affects mobility in the state. This Article will contend that the IDD requires attention as a mobility-limiting doctrine, even in states that have not yet applied it in that way. In a moment of heightened awareness of the human and economic price of mobility-restricting contracts, this non-contractual, ex post restraint looks increasingly suspect. As policymakers narrow the circumstances in which employers can contractually limit their employees' future prospects, they should repudiate the IDD, lest it undermine their reforms.
Stacey Dogan & Felicity Slater,
The Long Shadow Of Inevitable Disclosure
George Mason Law Review
Available at: https://scholarship.law.bu.edu/faculty_scholarship/3655