Academic journal article Boston University Law Review

Enforceability Tbd: From Status to Contract in Intellectual Property Law

Academic journal article Boston University Law Review

Enforceability Tbd: From Status to Contract in Intellectual Property Law

Article excerpt

INTRODUCTION

In June 2015, Senate Democrats introduced a new bill before Congress, the Mobility and Opportunity for Vulnerable Employees Act (the "MOVE Act"), which would bar non-compete agreements for low wage workers.1 The MOVE Act would also require companies to give job applicants advance notice before asking them to sign such a contract.2 While non-competes have in recent years become near-standard clauses in many industries, the legislative initiative was triggered by reports about the non-competes expanding to other jobs, such as sandwich makers earning barely above minimum wage at the fast food chain Jimmy John's3 and seasonal hourly warehouse workers at Amazon.com.4 Post-employment contract restrictions are now routinely imposed not just on high-ranking executives and high-tech engineers, but also on camp counselors,5 yoga instructors,6 and dog sitters.7 The MOVE Act primarily targets the use of non-competes against low-wage workers because its sponsors worry that non-competes depress wages and lock vulnerable workers in low-income jobs.8 The Act would ban non-compete clauses for workers making less than fifteen dollars per hour or the minimum wage in the employee's municipality.9 According to Senator Chris Murphy of Connecticut, "unfair use of non-compete agreements has a chilling effect on the upward economic mobility of low-wage workers and stifles their ability to climb out of poverty."10

The MOVE Act's notice requirement stems however from a broader recognition concerning all workers across all ranks: employees are frequently unaware of the contract restrictions they sign when they assume a new job. Notice, or the absence of notice, affects not only the decision to accept a certain job under particular terms but also whether to seek more information about the firm's practices in enforcing the restrictive covenant. Notice could also produce more information as to the enforceability of such restrictions in different jurisdictions.

While the MOVE Act is concerned with the spread of non-compete clauses because of the wages lost when employees are bound to one employer, this article shifts the focus from wages to innovation. It considers the ways in which contracts serve firms as means to enclose information beyond traditional intellectual property boundaries without adequate notice or debate. The article further expands the inquiry beyond the narrow focus on non-competes to human capital contractual restrictions more broadly. Non-competes are merely one aspect of human capital contracts. Human capital clauses include both employment and post-employment restrictions, such as innovation assignment clauses, non-disclosure agreements, non-solicitation clauses, and non-poaching clauses. Together, these contractual agreements comprise an integral part of intellectual property policy, shaping the flow of knowledge, skill, creativity, and inventiveness in innovation markets. The article presents the expansion of intellectual property law through employment contracts as an under-the-radar subversion of the boundaries and notice requirements set in traditional IP. In all stages of the contract relations-the hiring stage, the termination stage, and the adjudication stage-these contracts are ridden with uncertainty as to the substantive scope of the restrictions and the legal risks they entail.

This article proceeds as follows: Part I describes the increasing use of human capital contracts at work and the breadth of language typically employed in such contracts. Part II uses the lens of notice to understand the stages of the deal, which restricts the use of human capital beyond the traditional boundaries of intellectual property law. Human capital contracts are drafted under conditions of information asymmetry and characterized by a lack of bargaining. The contract is unilaterally drafted at a point in time when many variables are yet unknown and is often introduced after the employee has accepted the job offer and has already begun working. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.