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Study Suggests Non-Competes Inhibit Employee Creativity & Performance

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A recent article in the Harvard Business Review suggests, based on an informal study, that employees bound by a noncompete will underperform at work.

As with most things, there are a number of different ways to approach this study and its conclusions, particularly from the vantage point of an employer.

First, and at the risk of stating the obvious, the authors confuse association with causation. The study is lacking the most basic elements needed for a truly viable scientific study, such as control groups and an accounting for other confounding or complicating factors.

In other words, just because some employees who have a noncompete clause don't perform as well as other employees who don't have such a restriction doesn't necessarily mean that the non-compete is THE reason for their discrepancy in performance.

Second, at least in my view, the entire premise for the manner in which the study was conducted is inherently flawed; offering unvetted people money to perform some tasks is not nearly the same as people in the context of a regular, established job that they rely upon to feed their families.

Third, there is no indication as to what kind of cross-section (if any) these "employees" were culled from; for all we know, they could have all come from one city, age group and particular field of work. Naturally, if that were true (and I hope it's not), it would seriously undercut the credibility of the authors' conclusions.

That said, I still think there is a valuable nugget for the employer to consider: is it possible that binding a prospective or current employee to a non-compete will hinder their job performance? If so, is the trade-off still worth it?

Category: General