When you lock CEOs into non-compete deals, the average employee actually ends up with a safer workplace.
One might think executive contracts have nothing to do with factory floor safety, but binding a CEO to a firm appears to change their risk management profile. The study found that firms with 'trapped' CEOs have lower employee workloads and higher safety standards.
CEO non-compete agreements and workplace safety violations
SSRN · 6466467
I examine the impact of CEO non-compete agreements (NCAs) on workplace safety violations. Firms led by CEOs subject to NCAs exhibit a lower likelihood, frequency, and severity of workplace safety violations. A difference-in-differences design around staggered state-level changes in NCA enforceability is consistent with a causal interpretation. Additional evidence suggests that lower employee workload is a plausible channel through which CEO NCAs reduce workplace safety violations.