Lorenzo Giovanni Luisetto

In new research, Norman Bishara and Lorenzo Luisetto analyze the nature and proliferation of state legislative activity to regulate noncompete agreements since 2009. In the absence of a federal rule, these developments represent a promising step toward curbing the abuse of noncompete agreements.

American antitrust regulators have recently taken aim at noncompete clauses. They argue that noncompetes suppress labor bargaining power and thus wages. The Italian labor market differs from its American counterpart in its rigid protections for labor, but the use of noncompetes in Italy occur at about the same rate as in the United States and shows a correlation with lower wages for workers whose noncompete clauses are unjustified because their jobs require little training and do not grant access to trade secrets. The evidence from Italy suggests that better regulation of noncompetes and informing workers of their rights is justified on the whole.