The Impacts of Non-Compete Clause on Investments in Education and Training
Date Issued
2015
Date
2015
Author(s)
Hsiang, Pao-Yu
Abstract
This paper aims to determine the impacts of non-compete clauses used in Taiwan for two types of investments in education and training: by employees themselves and by companies for their employees. Analysis of the related literature indicates that a non-compete clause limits employees’ ability to change jobs, thereby reducing their rights when negotiating salaries. After signing a non-compete agreement, employees tend to reduce their amount of self-investment in education and training. This is especially obvious for industry-specific training, compared to general training. At the same time, a non-compete clause helps a company protect its specialized technologies and prevent the circulation of its trade secrets to competitors. As such, when a company enters into a non-compete agreement with its employees, it is more motivated to invest in employees’ education and training. Again, this is more obvious for investments in industry-specific training. The survey method was adopted to verify the aforementioned hypothesis, and employees were sent questionnaires for completion. The results from descriptive statistics, interval regression, and Tobit regression indicate that the use of a non-compete clause did not affect an employee’s choice regarding self-investments in education and training, but it did increase a company’s investments in its employees’ education and training. Furthermore, there was a greater impact on investments in industry-specific training than in general training.
Subjects
Non-compete clause
investment in industry-specific training
investment in general training
employee mobility
statistical analysis
Type
thesis
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ntu-104-R01341065-1.pdf
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