Analyzing the Non-Competition Covenant as a Category of Intellectual Property Regulation

Non-competition covenants operate as a type of intellectual property regulation-somewhat akin to trade secret law-but are rarely analyzed as such. Some commentators believe non-compete covenants are a problem for regional economic development. Others promote their enforceability on a theory that restrictive covenants reflect the employer's provision of employee training appropriately allow litigants to avoid having to prove a trade secret case against a departing employee. This article disagrees with the latter group and offers an intellectual property-based analysis of non-competition covenants.

At the heart of this essay is a fifteen-point synopsis of how non-competition covenants function with respect to innovation policy, power and size disparities, judicial rhetoric, and other factors. The goal is to provide new insight into the policy choices implicit in the use of restrictive covenants, and to supplement the regional economy-based critique of their enforceability.