I've had a buyout clause used while consulting before. The company was ending their relationship with the contracting company and wanted to keep a handful of individuals.

Less than, not more than

Here in Sweden non-competes without a financial agreement is void. And those that offer some financial are probably OK, but haven't been tried extensively.

The non-competes I've signed have offered 60% of my base pay for six months (the length of the non-compete) if I cannot find a job because of the contract if the company exercise it.

They never have exercised it for me.

I also see these as reasonable since they are part of the negotiation of selling the business. Non-competes as it relates to most ordinary employees in the US is typically a contract of adhesion: a surprise take it or leave it clause while signing an employment agreement, well after a job offer and salary negotiation.

Non-competes are restrictions on employees by their current employer. A non-compete agreement between a seller and buyer is perfectly fine.

That's how it works in California. I had a 3 year non-compete with VMware after we sold a business to them. It was restricted to the specific market and technology our business covered but didn't limit activities in other areas. It seemed completely fair to me.

Besides, competing would have meant doing exactly the same thing over again. What's the fun in that?

Isn't that doable via stay on and holdback clauses?

Why? They started one successful business. It seems good for society if they go on to start another.

I haven't heard much about it, but I am incredibly curious about how this is currently shaking out in the AI craze.

It seems these labs are revolving doors, and any kind of breakthrough knowledge would immediately make you incredibly valuable to other labs or incredibly valuable as a spinoff start-up. Never mind these researchers all knowing each other and certainly having more than a few common spaces (digital or IRL). And the excitement of working in a fresh field still littered with low hanging fruit.

I can't help but feel that a large part of the reason why the labs are neck and neck is because everyone is talking to everyone else.

I can't substantiate any of this though, it seems to have largely dodged anything besides internal conversation.

Have fun trying that in CA.

Inevitably, it's just the need for lawyers to intervene in "common sense" negotiations. It's never legal to do X, Y, Z, but if the business has all the lawyers and the employee has non, then it doesn't really matter whats legal; it's whose willing to exhaust the cash to fight the issue.

Which of course, is why unions are what's needed to properly negotiate employee-employer relationships, the same way a strong government is needed to negotiate corporate-civil relationships.

Americans, however, have decided that "individual freedom" is _soooooo_ valuable, that it only exists for people with enough cash to defend it.

Wait, I'm confused. Do you mean Boston should have made non-compete agreements illegal?

Because Washington has a Constitutional provision requiring that no law shall take effect sooner than 90 days after the end of the session in which it is adopted [0] unless it is an emergency law passed with a 2/3 vote, and the common convention for most normal laws is to set the first January 1 certain to come after the 90-day period of the current session as the effective date so that "new law day" for non-emergency laws is consistent.

[0] Each state is different here, but a "90 days after end of session", or "90 days after passage" rule for the soonest a passed bill can go into effect, with exceptions for emergency bills with special rules including a supermajority requirement, are pretty common, as are conventions of setting a January 1 effective date in the legislation itself when the minimum is X days from end of session or passage.

Especially when WA’s ruling party regularly uses false ‘emergency’ declarations to make new laws become effective immediately and because this lets them make new legislation immune to voter referendums (yes they abuse this loophole all the time). They could do the same here. If they don’t, it’s a choice made on purpose.

Why would it affect selling a business?

As the years go buy I'm gradually more and more in favor of restrictions to sell businesses. They tend to benefit two groups: the people running a successful business and the people running the even more successful businesses buying them.

They tend not to benefit the employees, the customers, the competitors and really anyone else besides a small number of people who are already very successful.

Personally I think the way to go about this isn't to ban non-compete agreements but instead to get a couple of highly public cases where said non-compete is voided because the employee didn't receive anything of value for it. Once case law is clear that it requires 80% of the employees salary for the term of the lockup, companies will only require it where it makes sense rather than applying it willy-nilly due to the essentially free nature.

What's the actual steel man argument for why noncompetes are good? I've never really encountered one, just seen the corporate advocacy that they don't want to deal with high employee turnover.

Best I can do: Non-competes are (possibly) unenforceable anyway, so signing one maybe acts as a value signal for the employee? "I'd have to violate my non-compete, so in order to do that and permanently burn the bridge with my current company, you need to pay me $X + $Y."

Frankly I don't buy it, though, because it assumes too much about the rationality of all actors involved and the savviness of the employee during negotiations.

Is there actually substantial resistance to this? Or just a few manufactured counter-arguments from news outlets trying to do a both-sides take on this?

Non-competes have been heavily limited or outright voided in California. That's an easy and obvious rebuttal to the Silicon Valley argument.

There's a lot of opposition to pretty much any nigh objectively good thing for the people. Just follow the money. It usually comes down to

1. lobbyists vying for a company who wants to keep power

2. the legislature having its own vested interest from relationship/deal/lobbying

3. the minority of constituents are the ones who constantly call in and go to townhalls, because they have the time, money, or energy to do so compared to someone who's at work during a townhall.

People in control of orgs and capital want to telegraph thought leadership via "we want to be the next Silicon Valley" without actually giving up control of workers or making the necessary system changes. For a parallel, see how Jamie Dimon says "AI could help bring about the 4 day work week." [1] Is JPMorgan Chase trying to move to a 4 day work week? No, of course not. Jamie likes to be important and have his proclamations disseminated, not actually make the change being used to chase clout and status (because once wealthy, there is nothing left to chase if one wants to chase something).

TLDR Talk is cheap, work and change is hard and painful (broadly speaking). Observe actions, not words.

[1] https://finance.yahoo.com/news/jpmorgan-ceo-jamie-dimon-says...

Related:

"CEO Said a Thing" Journalism - https://news.ycombinator.com/item?id=47577735 - March 2026

Non-competes are almost always unenforceable. Never take money (although even then, they're still mostly useless), and just ignore them and no one is going to do anything. That was what my business law professor taught us. No court is going to enforce a non-compete if it means the person who cannot compete is going to be unable to support themselves. The only time it'll be enforced is if you're already independently wealthy.

In other words, a completely useless scare tactic.

Not sure if this is meant sarcastically or not, but it is - it helps reduce transaction costs of changing employers. Anyone who has ever signed a contract with wide non-competes knows that it is hard for an individual to negotiate against it on an individual basis, but they are rarely enforced in practice, which leaves open individuals to worries about "maybe I'm one of the unlucky few?" These clauses then primarily only increased transaction costs, so eliminating them aids free exchange.

Companies need to put more care into who they trust, and maybe incentivize skin in the game. If leaving for a competitor means you lose equity, agency, ownership, or some intangible, that can outweigh bigger paychecks.

The market should be able to solve this problem without the government setting arbitrary rules, and people should be allowed to sign contracts that limit or restrict their freedom, so long as it involves informed consent from all parties.

If Microsoft wants to hire an AI expert for a million dollars a year, and restrict him from competing for 2 years after leaving Microsoft so as to avoid losing market advantage, that seems like a reasonable thing for Microsoft to want. If all Apple has to do to get all the Copilot secrets is hire the chief copilot engineer for 1.5 million, seems like that creates a toxic dynamic and all but guarantees acquihires and a near immediate turnaround in a startup to corporate pipeline for raiding IP.

Maybe we should be limiting businesses to doing business at a scale they can responsibly handle. If you can't get human customer service for your computer issues because Windows and Mac have scaled far beyond the number of users they could ever hope to handle, maybe that market needs regulation, and unless they scale customer service accordingly, they don't get to target a majority of the world's population as their customer base?

That'd certainly create jobs and opportunities for Linux and induce a revolution in software markets, and it'd limit the incentives for MS and Apple and big tech to do shitty things to suppress the markets overall.

Small startups in California (where many, if not the majority, of tech startups are headquartered) do just fine without enforceable non-compete agreements.

It's also already unlawful to steal another company's assets when you leave. Besides, companies should file provisional patent applications as soon as they invent valuable proprietary technology to prevent the sort of subject matter leakage you mention.

This is not a mechanism to protect startups. This is a mechanism to protect the flow of ideas, whether the ideas are flowing from a big company to a startup or vice versa. Workers who find a big company bureaucratic should be able to launch a startup. Workers who find a small startup insufficiently resourceful should also join a big company to get resources.

Employers have plenty of leverage over workers already.

Every time a pro-worker bill passes, there's an endless scree of "But what about the corporations?". Wow it's tiring.

No big company is going to bother poaching that way. They are either going to purchase the company outright or undercut them with their own competing product to kill it off through attrition. We're not in the 2010's anymore where people are banging at the door for singular SWE's.

acquhire practicies show that yes - sometimes people really ARE the company. However, i think for the average C# developer, or Epson printer specialist or wordpress or Bosch controller analyst, these arent really true.