New Evidence on Employee Noncompete, No Poach, and No Hire Agreements in the Franchise Sector

Download File
022323-WP-New Evidence on Employee Noncompete, No Poach, and No Hire Agreements in the Franchise Sector-Norlander

Peter Norlander, Loyola University Chicago


This paper presents new evidence about the prevalence, source, scope, content, and variety of anti-competitive behavior in the labor market. Drawing from a text corpus of 17,785 franchise disclosure filings, I find that 26% of filings from January 2011-August 2022 contained an employee noncompete clause that requires franchisees to bar employees from working for a competitor after leaving. Further, 44% contained a non-solicitation clause barring recruitment between firms, and 25% contain a no hire clause. Using new open-source, replicable methods to classify unstructured text, this paper also publicly releases: a document corpus, the software used to analyze the data, a knowledge base of rules to detect anti-competitive clauses, and an open-source machine learning classifier to detect no poach clauses. While prior evidence on anti-competitive practices largely draws from individual complaints, survey data, and limited hand-coded samples, this paper spotlights a large and representative sample of previously hidden inter-firm contracts that block employee mobility and describes tools that can automatically identify future unseen instances.

February 23, 2023


Job Mobility


Connect with us!

Explore the Equitable Growth network of experts around the country and get answers to today's most pressing questions!

Get in Touch