The Law and Economics of Employee Information Exchange in the Knowledge Economy

Mr. Fowler\u27s story illustrates nicely how, in the new economy, knowledge has become both the key production process component and an important object of exchange itself. While knowledge has always been a component of economic activity, it has become “the one factor of production” capable of increasing the productive capacity of both capital and labor. Mr. Fowler\u27s story also reminds us that, as it was the case in years past, the interests of employers and employees do not necessarily coincide when it comes to allocating rights regarding the ownership and exchange of knowledge.Interestingly, this transition towards a “knowledge economy,” and the implications that it has in resolving the inherent conflict between management and labor, has gone almost totally unnoticed by courts, legislatures, and legal scholars alike. The laws that regulate U.S. labor markets are based on a value system reflective of the industrial economy of the 1900s. In particular, the laws regulating the ability of employees to own and share information about their jobs are based on the premises underlying last century\u27s industrial economy. A disconnect thus has developed between the legal regime and the actual operation of labor markets, making our employment laws ineffective in handling the demands created by the shift towards the knowledge economy