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  • Trade Secret Law
  • Trade Secret Law
  • Secret Law
  • Secret Law

Articles published on Non-disclosure Agreements

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  • Research Article
  • 10.59992/ijlrs.2026.v5n4p8
الحماية العقدية للأسرار التجارية: دراسة تحليلية
  • Apr 22, 2026
  • International Journal of Law Research and Studies
  • Fatima Alharbi

This research aims to study the contractual protection of trade secrets in the Saudi legal system, using a descriptive-analytical approach. The study is divided into two sections. The first section addresses the nature of trade secrets by defining them in both legislation and legal jurisprudence, and then examines the conditions necessary for their protection. The second section explores the protection of trade secrets within the framework of contractual relationships, specifically within employment contracts and licensing agreements, through non-disclosure and non-compete agreements. The study reached several conclusions, the most important of which are: For a trade secret to be granted legal protection under the Saudi legal system, three conditions must be met: the information must be confidential in its final form; it must possess commercial value due to its confidentiality; and the rights holder must take the necessary and reasonable measures to maintain its confidentiality. Furthermore, the Saudi legislator refrained from protecting secrets that violate Islamic law or public morals. While the Saudi legislator did not regulate contracts that involve trade secrets, it did stipulate liability for breaching any contractual obligation related to confidentiality.

  • Research Article
  • 10.66308/air.e2026016
Digital Twin Integration for Lifecycle Management of Operating Industrial Facilities Under Continuous Production Conditions
  • Feb 28, 2026
  • American Impact Review
  • Bobur Karimov + 2 more

Background: Digital twin (DT) technology has emerged as a transformative approach for industrial asset management, yet the majority of existing frameworks target greenfield facilities or assume production can be interrupted during DT deployment. Operating industrial facilities under continuous production conditions-refineries, chemical plants, and power generation stations-face unique challenges including legacy system heterogeneity, zero-downtime requirements, and scalability constraints that remain insufficiently addressed in the literature. Methods: This paper proposes a five-layer DT integration framework specifically designed for brownfield industrial facilities operating under continuous production. The framework incorporates a phased zero-downtime deployment strategy progressing through passive monitoring, shadow mode, advisory mode, and closed-loop operation. The methodology was validated through a simulation environment replicating a mid-scale continuous petrochemical processing facility comprising 150 monitored assets and 500+ sensor points across heterogeneous control systems (simulation-based validation is standard practice for framework-level contributions where operational data from continuous production facilities remains restricted under non-disclosure agreements). Results: Across five independent simulation runs, the framework demonstrated a statistically significant improvement in Overall Equipment Effectiveness (OEE) from 67.9% (SD 1.12) to 85.0% (SD 0.71, p<0.01) across deployment phases, with DT synchronization accuracy reaching 99.6% after calibration. The predictive maintenance module achieved an AUC of 0.933 for equipment failure prediction within a 12-month horizon. Edge computing architecture reduced synchronization latency to a median of 17 ms compared to 185 ms for cloud-only deployment. Conclusions: The proposed framework addresses critical gaps in brownfield DT implementation by providing a structured, standards-aligned approach that maintains continuous production throughout all deployment phases. The results demonstrate that phased DT integration can deliver substantial operational improvements without compromising production continuity.

  • Research Article
  • 10.1093/bjc/azag007
Blue walls and black boxes: Theorizing the politics of knowledge in police technology
  • Feb 17, 2026
  • The British Journal of Criminology
  • Daniel Konikoff-Houpt

Abstract In 2020, journalists uncovered that Canadian police services had surreptitiously acquired Clearview AI’s privacy-invasive facial recognition technology without disclosing its use to the public. The revelations sparked national controversy, putting a spotlight on police’s penchant for keeping surveillance technologies a secret from external stakeholders. This article uses the Clearview AI controversy to examine the sociology and politics of knowledge surrounding police technology. Drawing on the theoretical framework of agnotology, this article argues that Canadian police rely on a complex web of legal, political and organizational structures—such as non-disclosure agreements, procurement by-laws and freedom of information legislation—to produce ignorance and assert the primacy of their own professional expertise about surveillance technology.

  • Research Article
  • 10.59188/eduvest.v5i12.52517
The Role of Non-Disclosure Agreements in Protecting Trade Secret Holders in Micro, Small, and Medium Enterprises (Comparative Study of Indonesian-Azerbaijan Law)
  • Dec 8, 2025
  • Eduvest - Journal of Universal Studies
  • Zahratul Maulida + 1 more

This research is motivated by the increasing potential for violations of trade secrets by business actors, particularly in the MSME sector, related to information of economic value in the technology and business sectors that is kept confidential. This study aims to understand the legal regulations regarding NDAs as an instrument for protecting trade secrets in Indonesia and Azerbaijan. This research uses normative legal methods and data obtained through library research, analysis of statutory regulations, studies of NDA violation cases in Indonesia, and literature related to the implementation of NDAs in Azerbaijan. The results show that in Indonesia, NDAs are not specifically regulated by law, but have legal force based on the principle of freedom of contract as stipulated in Article 1338 of the Civil Code. Meanwhile, in Azerbaijan, the implementation of NDAs is more effective due to support from government policies and legal institutions that assist MSMEs in maintaining the confidentiality of business information. These findings suggest that strengthening regulations and legal awareness regarding the use of NDAs is necessary to optimize the protection of trade secrets for MSMEs in Indonesia.

  • Research Article
  • 10.30649/ph.v25i2.506
The Importance of Non-Disclosure Agreements in Employment Contracts: Protecting Trade Secrets Beyond the Terms of Standard Employment Contracts
  • Nov 21, 2025
  • Perspektif Hukum
  • Dhaifina Zayyan + 1 more

This study examines the importance of trade secret protection in Indonesia. Trade secret protection is crucial for maintaining honesty and fairness in business competition. Without it, companies can face theft and espionage, which harm the owners of these valuable intangible assets. An NDA is legally binding, meaning that the parties signing the agreement are obligated to comply with all agreed terms. If one party violates the NDA, for example by leaking confidential information, the injured party has the right to seek compensation through legal channels. Law Number 30 of 2000 stipulates criminal sanctions for violations of Article 17 of Trade Secrets or actions that violate Articles 13 or 14, which can be punished with a maximum of two years' imprisonment or a fine of up to Rp 300 million, or through arbitration and alternative dispute resolution methods such as negotiation, mediation, or conciliation, in accordance with Law Number 30 of 1999.

  • Research Article
  • 10.1609/aies.v8i2.36610
The Politics of AI Systems Are Inextricable from Their Supply Chains: Public Values Versus the Digital Political Economy
  • Oct 15, 2025
  • Proceedings of the AAAI/ACM Conference on AI, Ethics, and Society
  • Ben Gansky

This article narrates the trajectory of a conflictual relationship between a public planning consortium and their AI technology vendor. Through an analysis of three years of email correspondence obtained via Freedom of Information Act request, I follow a team of transit planners from the U.S. state of Oregon who insisted that their vendor and its technology be transparent and accountable; conflicts emerged. I argue that this case demonstrates fundamental limits on the ethics and contextual appropriateness of AI tools that are dependent on data supply chains entangled with the digital political economy. These limits are enacted by such legal mechanisms as trade secrecy protections and non-disclosure agreements, as well as by the structural complexity and recursiveness of AI/ML model and data supply chains. Negotiations over the politics of the digital tool in question became articulated as conflicts over the provenance of the tool’s training data. By calling attention to how digital production relations are always situated within chains of dependencies, my analysis yields a more nuanced understanding about how the politics of AI-based tools are shaped in practice, and the terrain on which they might be contested and attempts made at re-configuration and alignment with public values.

  • Research Article
  • 10.1177/1037969x251388311
NDAs: Legally unenforceable or just unethical? A contract law perspective
  • Oct 14, 2025
  • Alternative Law Journal
  • Renata Grossi

Evidence suggests that non-disclosure agreements (‘NDAs’) are widely used. Instead of their intended use of protecting trade secrets and commercially sensitive information, they were exposed during #MeToo as tools to hide sexual harassment and assault. Evidence suggests they remain pervasive and pernicious, and require more scrutiny. As contracts, how legally enforceable are they? The article will attempt to answer this question by applying some well-known contract principles to the real-life NDA between Zelda Perkins and Harvey Weinstein/Miramax, widely reported in the media. This analysis will cast some doubts around their enforceability and at the same time suggest a broader social role for contract law.

  • Research Article
  • 10.1177/13505084251372460
‘You can’t buy my silence’: Five lessons on resistance and organizational silence amidst the expanding use of non-disclosure agreements
  • Oct 8, 2025
  • Organization
  • Kate Kenny + 3 more

Non-disclosure agreements (NDAs) are increasingly used by powerful organizations to silence victims of workplace abuse, discrimination and misconduct. While originally designed to protect intellectual property, NDAs have evolved into tools that suppress resistance, conceal unethical and sometimes criminal behaviour and reinforce organizational silence. This Acting Up piece draws on the experiences of Zelda Perkins – co-founder of the global campaign Can’t Buy My Silence and the first woman to publicly break her NDA with Harvey Weinstein – to examine how organizational resistance can be enacted despite legal constraints. Perkins’ actions, and the growing movement against NDA misuse, offer organization scholars critical insights into the lived realities of resistance, the weaponization of confidentiality and the psychological toll of enforced silence. We outline five key lessons about resistance strategies that challenge dominant theories in organization studies, highlighting how real-world struggles complicate and enrich our understanding of power, voice and social change. This Acting Up piece contributes to ongoing conversations about organizational ethics, whistleblowing, resistance and the politics of silencing in the workplace. Organization scholars can learn much from Zelda’s Acting Up , its tactical and somewhat uncomfortable insights.

  • Research Article
  • 10.47268/tatohi.v5i7.3299
Protection of Trade Secrets Through Non-Disclosure Agreements Against Worker Violations
  • Sep 30, 2025
  • TATOHI: Jurnal Ilmu Hukum
  • Putu Nadia Monica Putri + 1 more

Introduction: This article analyzes legal protection of trade secrets through the implementation of Non-Disclosure Agreements (NDAs), particularly in cases of employee violations. The study is based on Case Number 14/Pdt.Sus-PHI/2020/PN Dps as a case study to assess the effectiveness of NDAs within the scope of Indonesian labor law.Purposes of the Research: The purpose of this research is to examine the role of NDAs as legal instruments in protecting corporate trade secrets from breaches of confidentiality by employees, and to evaluate the binding power of such agreements in industrial dispute resolutions.Methods of the Research: This study employs a normative juridical method, using both case and statutory approaches. Data were obtained through a literature review of relevant regulations, jurisprudence, and case documents, analyzed qualitatively.Findings of the Research: The findings indicate that NDAs are legally valid as supplementary employment agreements that can safeguard corporate interests. However, their effectiveness depends heavily on the clarity of contractual clauses, their alignment with employment relations, and the willingness of employers to assert their rights in court. This study contributes to the development of trade secret protection concepts in Indonesia, particularly within the labor law domain, and highlights the need for more specific and comprehensive regulation of NDAs.

  • Research Article
  • 10.38035/jlph.v5i6.1597
The Importance of Non Disclosure Agreement (Nda) As a Form of Trade Secret Protection in Foreign Higher Education Consultants in Indonesia
  • Sep 28, 2025
  • Journal of Law, Politic and Humanities
  • Yoyo Arifardhani

The development of the overseas higher education consulting industry in Indonesia has created a need for effective trade secret protection. This study aims to analyze the effectiveness of Non-Disclosure Agreements (NDA) as an instrument for protecting trade secrets, identify the challenges of their implementation, and formulate strategies to optimize compliance while maintaining employee career mobility. Using normative legal research methods with statutory, conceptual, and case approaches, this study analyzes primary, secondary, and tertiary legal materials related to the implementation of NDAs in the industry. The results show that the effectiveness of NDAs is highly dependent on the clarity of the clause formulation and the monitoring mechanisms applied. The main challenges include the difficulty of defining the boundaries of confidential information, the complexity of proving violations, and the limitations of post-employee monitoring mechanisms. Optimal strategies include the development of a structured knowledge management system, periodic training programs, and incentive mechanisms to encourage compliance. This study recommends the development of a standardized NDA template, strengthening monitoring mechanisms, and continuing education programs to improve the effectiveness of trade secret protection in the overseas higher education consulting industry in Indonesia

  • Research Article
  • 10.1177/00910260251369131
Disincentives to Reporting Sexual Harassment in Government Agencies: A Large-Scale Survey
  • Sep 18, 2025
  • Public Personnel Management
  • Hengky Latan + 4 more

This article investigates the factors that discourage employees from engaging in formal complaining behavior within government agencies, particularly in response to workplace misconduct such as sexual harassment. The data used in this study were obtained from the Merit Principles Survey (MPS) 2021, and covariance structure analysis (CSA) was applied to examine the relationships between variables. Guided by social identity theory (SIT), the study tests hypotheses related to perceived disincentives that may inhibit employees from submitting formal complaints. A key contribution of this research lies in its integrated analysis of three critical deterrents—non-disclosure agreements, non-disclosure policies, and the perceived seriousness of threats—which have not previously been examined collectively in the context of complaint behavior. The results offer valuable insights for public sector administrators aiming to foster transparent and responsive organizational cultures.

  • Research Article
  • Cite Count Icon 1
  • 10.1007/s42979-025-04300-x
Evaluating Shallow and Deep Learning Strategies for Legal Text Classification of Clauses in Non-Disclosure Agreements
  • Aug 29, 2025
  • SN Computer Science
  • Niall Mccarroll + 7 more

Abstract A non-disclosure agreement (NDA) is a legal contract between at least two business parties that restricts the disclosure of confidential and sensitive information. As part of the NDA document negotiation and review workflows, there is a need to identify, extract and track clauses to ensure they comply with the companies’ policies. The legal Natural Language Processing (NLP) landscape is rapidly evolving and offers a range of technologies and Machine Learning tools, such as text classification, that enable users to automate various key stages of the contract life cycle, thus easing the administrative burden. The proposed system was developed to classify individual clauses within an NDA contract. Automated legal text classification is challenging due to the high dimensionality of a word-based feature space. Additionally, corporate privacy concerns have limited the availability of publicly accessible legal corpora. To leverage the power of deep learning neural architectures, pre-trained word embeddings have attempted to resolve these issues by reusing an input feature space trained on a large, general-purpose dataset, and then fine-tuning it to adapt to a downstream classification task on a smaller annotated legal dataset. In this paper, we evaluate several shallow and deep supervised learning strategies for the classification of 26 individual mutually exclusive clause classes within an NDA contract. The impact of using pre-trained word embeddings on a small legal NDA contract dataset is also evaluated. The shallow SVM and XGBoost classification methods outperform the deep learning long short-term memory neural network (LSTM) approach in a small imbalanced dataset, even when supported by pre-trained embeddings. The potential of using novel transfer learning techniques that allow reuse of legal-domain specific NLP models and feature representation schemes is explored.

  • Research Article
  • 10.1080/17577632.2026.2640307
Allegations of sexual misconduct, wrongdoing and the ‘public interest’ in media law
  • Jul 3, 2025
  • Journal of Media Law
  • Fiona Brimblecombe

ABSTRACT This article considers allegations of sexual misconduct and general wrongdoing in English media law. Firstly, it examines the torts of misuse of private information (‘MPI’) and defamation in relation to allegations of sexual impropriety and finishes by considering data protection law and statements on general wrongdoing. A particular concern is the notion of the ‘public interest’ and its influence in adjudicating on such disclosures. The central argument pulls in two different directions. On the one hand, it considers areas where positive strides have been made, such as the historic power of MPI to protect women’s intimate lives and the extension of the s 4 Defamation Act 2013 ‘public interest defence’ to allegations of sexual misconduct. On the other, the article notes areas of concern. One such area of concern is in MPI, where the notion of public interest is being misused in cases concerning non-disclosure agreements. The piece also considers data protection law and online disclosures of more general wrongdoing, including information about past convictions – it concludes that data protection law is far from a haven for wrongdoers attempting to escape accountability.

  • Research Article
  • 10.1097/iio.0000000000000573
Eyeing Opportunity: A Review of Private Equity in Ophthalmology.
  • Jul 1, 2025
  • International ophthalmology clinics
  • Darren A Chen + 1 more

Private equity (PE) acquisition of ophthalmology practices has grown rapidly, reflecting broader trends in the consolidation of health care services. The driving force behind these acquisitions is the potential for high returns through operational efficiencies, increased bargaining power with insurers, and access to lucrative outpatient procedures. However, PE's impact on the quality and cost of ophthalmic care remains unclear. Studies show mixed results: some report increased use of expensive treatments and higher costs, while others suggest minimal changes in patient outcomes or spending. PE's appeal to ophthalmologists includes capital infusion for practice expansion and improved risk management, though concerns exist over profit-driven incentives possibly compromising patient care. The market for ophthalmology practices remains fragmented, with PE firms capitalizing on consolidation opportunities. Despite the growth, there are challenges to assessing the full impact of PE involvement, particularly due to limited research, nondisclosure agreements, and difficulty in selecting control practices for comparison. While PE acquisitions have been accelerating, recent reports indicate a slowdown in 2024, influenced by factors such as interest rates and federal investigations into the health care sector. The future of PE in ophthalmology will likely depend on market conditions, regulatory changes, and further research into its long-term effects on care quality and physician autonomy.

  • Research Article
  • 10.33731/12025.324979
Non-compete clause as a protection remedy of employer`s trade secrets: pro & contra
  • Mar 18, 2025
  • Theory and Practice of Intellectual Property
  • Nina Bilousova

The article considers the non-compete clause as a protecting tool of employer's trade secret. Looking for optimal approach to the legal regulation of non-compete clause with employee, it is highlighted the latest trends of foreign experience (mainly the USA and Great Britain). The focus of attention has become The Non-Compete Clause Rule adopted by the US Federal Trade Commission in 2024, by which non-compete clauses are recognized as acts of unfair competition and are subject to a complete ban in relations with workers, which include employees, individual entrepreneurs etc. It is argued that The Non-Compete Clause Rule has started a trend towards limiting and even banning the non-compete clause with individuals. It is proposed to pay attention to the research results of the Federal Trade Commission, which revealed the depressing effect of the non-compete clause on the entrepreneurial and labor activity of workers and the inhibiting effect on the innovative economy. Furthermore, it is considered that non-compete clauses become an obstacle to the foundation of startups by former employees, do not give an opportunity to use their experience in mentoring startups. It is emphasized that legal regulation of the non-compete clause should take into account the interests of Ukrainian society (public interests) and maximally contribute to the activation of entrepreneurship, including innovative ones, among Ukrainians and the release of their labor potential. It has been established that the non-compete clause is only one of the tools for protecting the employer's trade secret, there are other means that do not directly limit competition: trade secrets' protection by intellectual property rights, patent law where it is relevant, copyright for the relevant content of trade secrets, the right sui generis to non-original databases and database content; non-disclosure agreements. The stability of the workforce in the company can be ensured by improving working conditions. It is substantiated the expediency of banning non-compete clauses in contracts with individuals, but active use by business entities of other tools to protect their trade secrets. It is argued that a non-compete clause may be used as a condition giving the right to remuneration according to the terms of the contingent transaction.

  • Research Article
  • Cite Count Icon 1
  • 10.1287/msom.2024.0907
Note on Optimal Procurement Mechanisms for Assembly
  • Nov 1, 2024
  • Manufacturing & Service Operations Management
  • Xi Shan + 2 more

Problem definition: We consider contract confidentiality in a decentralized supply chain, in which a single principal orders different components from different agents, each of which has private cost information. The principal may commit to publicly observed bilateral contracts or offer secretly observed contracts to each agent simultaneously. We also consider the problem of sequential contracting. Methodology/results: By correcting the main analysis in Hu and Qi [Hu B, Qi A (2018) Optimal procurement mechanisms for assembly. Manufacturing Service Oper. Management 20(4):655–666], we employ passive beliefs to study secret contracting. We show that there is a unique configuration of two-part tariffs under secret offers in both simultaneous and sequential contracting. We also extend the analysis to take into account ex post individual rationality (IR), which is arguably more relevant in this assembly setting. With ex post IR, we show that the traditional two-part tariffs should be augmented with payment adjustments. Managerial implications: We find that the efficiency achieved through public offers can be maintained with secret offers in this assembly setting contrary to conventional wisdom. Our analysis, thus, offers an explanation for why nondisclosure agreements are important and common in practice. Funding: This work was supported by the National Natural Science Foundation of China [Grant 72192805]. Supplemental Material: The online appendix is available at https://doi.org/10.1287/msom.2024.0907 .

  • Research Article
  • 10.24144/2788-6018.2024.05.39
Legal analysis of the contract on non-disclosure of commercial information
  • Oct 12, 2024
  • Analytical and Comparative Jurisprudence
  • O Filiuk

In the conditions of the development of market relations in Ukraine, the protection of commercial information is becoming an increasingly urgent issue. Growing competition, technological progress and the globalization of markets encourage business entities to implement various measures to ensure the privacy of their data. One of the most effective tools for this is a commercial non­disclosure agreement, which is designed to protect sensitive information from unauthorized use and/ or disclosure. In connection with the constant changes in the economic and legal environment, there is a need for research in the field of commercial non­disclosure agreements. The development of new approaches to the conclusion and enforcement of non-disclosure agreements will allow taking into account changes in the economic environment and technological innovations, which in turn will strengthen the legal framework for business protection. The article examines the legal nature of an agreement on non-disclosure of commercial information, in particular in the context of labor relations, where one of the parties is an employee, and also provides a definition of such an agreement. The author notes that an essential condition of this contract is a clear definition of the information subject to protection. The definition of trade secret covers financial, technical, legal, corporate information and other information of commercial value. The author offers a list of information that can be classified as a commercial secret, and emphasizes the importance of adapting this list to the specifics of legal relations. In particular, in contracts concluded between an employer and an employee, it is necessary to provide for information protection conditions, and also an important aspect is the regulation of the term of the contract, which can extend both to the period of the employment relationship and after its termination. The author emphasizes that the regulation of relations regarding the non-disclosure of commercial information can be implemented within the framework of a mixed contract containing elements of various contracts, which opens up new opportunities for the legal protection of commercial secrets in various spheres of activity. The legal analysis of the specified contract provides an opportunity to consider in detail the structure, essential conditions and features that can significantly affect the effectiveness of its application.

  • Research Article
  • Cite Count Icon 1
  • 10.1080/14759551.2024.2413075
Intersecting liminalities and transition rites: non-disclosure agreements and misconduct in organizations
  • Oct 11, 2024
  • Culture and Organization
  • Victoria Pagan

ABSTRACT For what reasons may NDAs continue to be an attractive measure to conceal severe misconduct in organizations, despite high-profile criticism? I theorize severe misconduct as a critical moment of separation of victim-survivor, perpetrator, and the social order of the organization. This provokes liminalities and I read Giesen's four liminal phenomena (victims, monsters, garbage, and seduction) as imagination devices in the analysis of the accounts of those who have experienced severe misconduct. In doing so, I show that the multiplicative effects of these liminal phenomena intersect in such a disruptive manner that NDAs offer an attractive ceremony towards transition; a seductive way for organizational actors to transform/adjust the presence of victims and monsters, hiding and/or recycling their garbage. I contribute by theorizing meta-liminality and intersecting liminal phenomena emerging from severe misconduct in organizations, showing empirically examples of why NDAs may be used to ceremonially manage the transition in these cases.

  • Research Article
  • 10.9790/1813-13091928
Organizational Trade Secrets and Organisational Performance: Leveraging Technical Information for Competitive Edge in Small Scale Businesses
  • Sep 1, 2024
  • The International Journal of Engineering & Science
  • Prince Godswill Akhimien + 2 more

This study examines the impact of organizational trade secrets and organizational performance, focusing on technical information management practices and competitive edge as sub-variables in measuring the performance of small and medium-sized enterprises (SMEs) in Ekpoma, Edo State, Nigeria. Utilizing a descriptive survey research design, data were collected from 108 SMEs using structured questionnaires. The analysis, conducted through SPSS software, includes descriptive statistics, correlation, and regression analyses to assess the relationship between technical information management practices and competitive edge. Findings reveal that robust cybersecurity measures, the use of Non-Disclosure Agreements (NDAs), and regular employee training on intellectual property are the most prevalent and influential practices. These practices significantly correlate with improved financial results, market share, customer satisfaction, and innovation rates. The regression analysis confirms that technical information management practices collectively explain a substantial portion of the variance in organizational performance. The study underscores the importance of strategic technical information management for enhancing the competitive edge and achieving sustainable growth in SMEs. Recommendations include enhancing cybersecurity measures, enforcing NDAs, conducting regular employee training, documenting technical information, seeking legal advice on intellectual property, and regularly evaluating management practices to ensure they contribute effectively to organizational performance

  • Research Article
  • Cite Count Icon 13
  • 10.1002/smj.3634
Employment restrictions on resource transferability and value appropriation from employees
  • Jul 18, 2024
  • Strategic Management Journal
  • Natarajan Balasubramanian + 2 more

Abstract Research Summary We examine the joint adoption of four employment restrictions that limit firm resource outflows—nondisclosure (NDA), non‐solicitation, non‐recruitment, and noncompete agreements—and their associations with value appropriation from employees. Using novel individual‐ and firm‐level survey data, we find that when firms adopt restrictions, they tend to adopt either all four restrictions or only an NDA. Adoption of all four restrictions is more likely when workers have access to valuable resources, noncompetes are more enforceable, and states adopt the inevitable disclosure doctrine. Employees with all four restrictions earn 5.4% less than employees with only NDAs, and this effect is driven by workers with low bargaining power. Analyses of earnings and a single restriction (e.g., only noncompetes) yield opposite results from those considering joint adoption, likely because of selection. Managerial Summary Valuable firm resources are often embedded in employees. We study whether and when firms adopt four employment restrictions that could protect such resources—agreements not to disclose information, not to solicit clients or coworkers, and not to join or start a competitor—and examine the extent to which they are associated with value capture from employees. Using novel firm and worker‐level surveys, we find that firms mostly adopt either all four restrictions together, only an NDA, or use no restrictions. Workers are more likely to have all four restrictions when they have access to valuable resources, when noncompetes are more enforceable, and when states adopt the inevitable disclosure doctrine. Finally, all four restrictions are associated with 5.4% lower earnings on average relative to workers with only an NDA, driven by workers with low‐bargaining power.

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