Study Suggests Non-Competes Disproportionally Stifle Opportunities for Women

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A recent article by Matt Marx, a business professor at Cornell University, suggests that non-competition agreements in the workplace disproportionately deter women from entrepreneurship. There is a substantial gender gap in those who start new businesses. Although there are a number of factors for that gap, the study finds that, in part, it is due to the possibility of litigation from such agreements. Non-competition agreements allow employers to enjoin their employees from leaving to start a rival business. The study points out that women as a whole tend to be more risk adverse compared to men. Thus, the mere risk of a lawsuit by a prior employer to enforce the contract disproportionality deters women from starting a competing business or venturing into more profitable areas or services for a new business.

The article is titled “Employee Non-compete Agreements, Gender, and Entrepreneurship” and was published in September 2021 in Organization Science.

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