Description of Difference between High vs. Low Enforceability States
| Percentile of CNC Enforceability Index (2009) | Full Sample of 50 States (Ordered by Rank of Weakest to Strongest Enforceability within and across Categories) | LEHD Sample of 30 States (Ordered by Rank of Weakest to Strongest Enforceability within and across Categories) | Illustrative Samples of Enforceability Policies (from Bishara 2011 and Other Sources Indicated) | Mean of Stuart and Sorenson (2003) Dummy for Low Enforceability (LEHD Sample) |
|---|---|---|---|---|
| Bottom quintile (low enforceability) | North Dakota, California, New York, Alaska, Oklahoma, West Virginia, Montana, Arkansas, Rhode Island, Virginia | California, Oklahoma, West Virginia, Montana, Arkansas, Rhode Island, Virginia | California (and North Dakota) have anti-noncompete enforcement statutes without exceptions for any postemployment restrictions. | 0.57 |
| Middle 60% (moderate enforceability) | Texas, South Carolina, Hawaii, Nebraska, Wisconsin, Minnesota, Georgia, Nevada, Mississippi, Ohio, Oregon, Pennsylvania, Arizona, North Carolina, Wyoming, New Hampshire, Washington, Alabama, Colorado, Maine, Tennessee, Michigan, Massachusetts, Louisiana, Delaware, Maryland, Vermont, Indiana, New Mexico, Idaho | Texas, South Carolina, Hawaii, Wisconsin, Georgia, Nevada, Oregon, North Carolina, Washington, Colorado, Maine, Tennessee, Louisiana, Maryland, Vermont, Indiana, New Mexico, Idaho | Most have some legislation discussing noncompetes. For example, Colorado allows labor contracts that require an employee to repay training costs for employment that lasts less than two years, and recognizes noncompetes specifically for “e]xecutive and management personnel and officers and employees who constitute professional staff to executive and management personnel.” | 0.18 |
| Top quintile (high enforceability) | Kentucky, New Jersey, Illinois, Utah, Iowa, South Dakota, Missouri, Kansas, Connecticut, Florida | New Jersey, Illinois, Utah, Iowa, Florida | Florida’s noncompete law is viewed as strongly proemployer; key provisions include one that prevents consideration of harm to the employee and another that encourages courts not to construe a restrictive covenant narrowly. | 0 |
Notes: Stuart and Sorenson (2003) use a dummy indicator for whether the state has a statute that “precludes or severely limits” an employer’s ability to enforce CNCs (drawing on the Malsberger treatise edition of 1996).