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December 2007

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From:
John Allison <[log in to unmask]>
Reply To:
Academy of Legal Studies in Business (ALSB) Talk
Date:
Mon, 31 Dec 2007 16:34:10 -0600
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Thanks very much, Robert.  I'll look into it.

One has to be very careful about subtleties in this area, like others.  I think that the authors of the IP casebook I use employed law students for research on noncompetes, and they didn't get it right.

John

-----Original Message-----
From: Academy of Legal Studies in Business (ALSB) Talk [mailto:[log in to unmask]] On Behalf Of Robert Bird
Sent: Monday, December 31, 2007 4:07 PM
To: [log in to unmask]
Subject: Re: Noncompete Agreements; Article; Video Clip and Maps

The most comprehensive source on restrictive covenants I've found is Brian Malsberger's "Covenants not to Compete: A State by State Survey"  This massive multivolume tome discusses all fifty states and the district of columbia in detail.

As for the MA/CA effect, a good article was published by Ronald Gilson in the late 90s in the NYU Law Review.  "Route 128" was in the title.  I don't remember the rest.

There is also an empirical work in progress by Mark Garmaise at UCLA on restructive convenants.  He uses the Malsberger book as a source.

Best,

Robert C. Bird
Assistant Professor
University of Connecticut
email: [log in to unmask] <mailto:[log in to unmask]>
View my research on my SSRN Author page:
http://ssrn.com/author=56987 <http://ssrn.com/author=56987>

________________________________

From: Academy of Legal Studies in Business (ALSB) Talk on behalf of John Allison
Sent: Mon 12/31/2007 4:58 PM
To: [log in to unmask]
Subject: Re: Noncompete Agreements; Article; Video Clip and Maps



Yes, I read that case.  I viewed it, perhaps mistakenly, as a narrow holding.  Not only was specific consideration required, but the promise that served as consideration had to be executed.

John

-----Original Message-----
From: Academy of Legal Studies in Business (ALSB) Talk [mailto:[log in to unmask]] On Behalf Of Larry E. Stuart
Sent: Monday, December 31, 2007 3:41 PM
To: [log in to unmask]
Subject: Re: Noncompete Agreements; Article; Video Clip and Maps

Actually, they are enforceable in Texas and are generally enforced as
long as they are reasonable in scope (geographic/time).  The Texas
Supreme Court ruled in a case called Sheshunoff that a promise of future
access to confidential information is sufficient consideration to
support enforcement of a non-compete with an at-will employee as long as
the employee has legitimately received some confidential information
before the agreement is enforced.

I am an Adjunct Professor in the Jones School at Rice and a full-time
litigator.  We routinely handle non-compete cases, and it is my personal
experience that non-compete agreements are routinely enforced in Texas
(particularly Houston and Dallas).  However, enforcement is largely
judge and case-specific.

Laurence E. Stuart
Legge, Farrow, Kimmitt, McGrath & Brown, L.L.P.
[log in to unmask]


-----Original Message-----
From: Academy of Legal Studies in Business (ALSB) Talk
[mailto:[log in to unmask]] On Behalf Of John Allison
Sent: Monday, December 31, 2007 3:32 PM
To: [log in to unmask]
Subject: Re: Noncompete Agreements; Article; Video Clip and Maps

Yes, but one must be careful about this.  His social science research is
probably quite good, but I suspect that there are some flaws in the
legal research that underlies it.  He is right on target when he
compares MA and CA.  Actually, someone has already studied the economic
effects of the different treatment of noncompetes in MA and CA--Analee
Saxenian in a book titled "Regional Advantage" (I forgot the subtitle).

He is also right about Montana not enforcing them, and probably about ND
(although there are no reported cases in ND going back to the late
1800s).

As soon as I can, I'll further investigate the states he identifies as
not enforcing them.  He also misses some important subtleties in at
least three states he identifies as enforcing them: In Texas, they are
supposedly enforceable, but the courts actually will not enforce them
against at-will employees unless there is separate consideration.  This
means that they are usually not enforced.  In Louisiana, my research
indicates that they are enforceable only with respect to employees who
leave to start there own businesses, and not to those who leave to go to
work for a competitor.  If someone from Louisiana knows something I
don't about the law there, please correct me.  In Alabama, my
interpretation of the law is that an employer cannot make the signing of
a noncompete a condition of initial employment, but can require it after
hiring.  There appears to be nothing in Alabama law that prevents the
employer from hiring an employee and later firing her for not signing a
noncompete.  Again, I hope that if I'm wrong in my reading of AL law, I
hope someone will correct me.

In some, some of the legal research behind this study is quite suspect.

John


----Original Message-----
From: Academy of Legal Studies in Business (ALSB) Talk
[mailto:[log in to unmask]] On Behalf Of David Canarie
Sent: Monday, December 31, 2007 2:29 PM
To: [log in to unmask]
Subject: Noncompete Agreements; Article; Video Clip and Maps

Good article on noncompete agreements from 12/30/07 Boston
Globe...includes 6:45 video clip of HBS school researcher who discusses
his study of the impact of noncompetes...and also includes a map
indicating which states do not enforce them.

http://www.boston.com/business/articles/2007/12/30/why_noncompete_means_
dont_thrive_/

--------------------------------------------------------------
J. David Canarie, Jr., Esq.
Department of Business Administration and Finance
417 Alfond Hall
Saint Joseph's College of Maine
278 Whites Bridge Road
Standish, ME 04084-5243

[log in to unmask]
www.sjcme.edu <http://www.sjcme.edu/>

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