In case of emergency, block the exits: against the routine use of non-competes

Abstract Non-compete clauses (NCCs) are widely used and discussed, but often too narrowly. While conventional accounts focus on the benefits of NCCs to employers, Harrison Frye has proposed that they can also serve employees by acting as a clear, costly signal. I argue that both views rely on an overly narrow analysis. A wider view shows that NCCs cause market failures, undermining their utility as protective or signalling devices. Because of these negative effects, I extend Frye’s account to argue that NCCs should be used only as targeted interventions under exceptional conditions, if they are used at all.