> What's the actual steel man argument for why noncompetes are good?

It probably depends on the kind of job.

If say Walmart tried to use a noncompete to stop cashiers from going to Target there probably is no reasonable argument in favor of that.

On the other when the employee is a top level executive who knows all the company's trade secrets and all their plans for the next year or so and they want to go to a direct competitor it is hard to see how they won't use that information at the competitor. Even if they scrupulously try to uphold any NDAs they are under and so don't consciously do it stuff will leak.

If the first company sues accusing the second company and/or ex-employee of using such information it can get pretty messy, and consumer judicial resources better used for other things.

A policy then of allowing noncompetes in this situation might overall be beneficial. Top level executives are generally well compensated and should be sufficiently sophisticated financially to understand the consequences of a noncompete and take that into account when deciding on taking the job so having to sit out 6-12 months before taking a directly competing job should not be a serious issue.

In theory, something like a technical job that requires extensive training. I always see reports about a lack of training for high tech trade / manufacturing jobs, as they require up to 2 years of training, but training slots are limited. You might get companies to pay the training if they could be assured the person would not run to a competitor. But even that should be agreed up front, with a limited term (eg we will train your two years, then pay you $X, and you will be subject to a noncompete for four years)

I am glad most places are getting rid of non-competes. But here is the best argument I've heard for them:

For many companies, a lot of their value is in their intellectual property. Non-competes exist not because the company will enforce it against employees (they might, but they usually don't), but more as a fig-leaf to potential investors down the line asking about the value of the intellectual property. The argument goes, if someone could easily leave the company with the knowledge earned and go to a competitor, then the investment wouldn't be as valuable.

> What's the actual steel man argument for why noncompetes are good?

It makes it possible to confidently buy a business that's mostly or all goodwill. Otherwise the previous owner can simply poach all the clients.

Also lots of jurisdictions allow non-competes as long as the employee is paid for the duration of the non-compete clause. Obvious win there: paid vacation or double up your salary by working for a non-competing firm.

Non-competes on employees without compensation are obviously bad.

Yes. The US Chamber of Commerce is particularly noteworthy in their attempts to slow the deployment of this policy at scale. They of course act on behalf of their members as a reputational laundering operation, so their members do not have to engage in this lobbying directly (potentially exposing them to reputational risk).

U.S. Chamber of Commerce and business groups file lawsuit challenging FTC noncompete ban - https://www.fmglaw.com/employment-law-blog-us/u-s-chamber-of... - April 26th, 2024

> Less than 24 hours later, the U.S. Chamber of Commerce, Business Roundtable, the Texas Association of Business, and the Longview Chamber of Commerce filed a lawsuit against the FTC in the U.S. District Court for the Eastern District of Texas alleging that the consumer protection agency lacks the authority to issue rules that define unfair methods of competition, and instead, the FTC Act only allows it to bring cases challenging particular practices. The Chamber’s Complaint also contends that even if the FTC possessed such authority, the “noncompete rule would still be unlawful because noncompete agreements are not categorically unlawful under Section 5.” The lawsuit further argues that the rule is “impermissibly retroactive” and reflects an “arbitrary and capricious exercise” of the FTC’s power.

> The Chamber of Commerce is seeking an order “vacating and setting aside the noncompete rule in its entirety” and an order permanently enjoining the FTC from enforcing the rule. The plaintiffs are also seeking an order to delay the effective date and implementation of the noncompete ban until the conclusion of the case.

The problem is it won't get as far as trial, if the old company gets wind of it early enough (and they often do). The old company will reach out to the new company and politely inform them they believe they have grounds for a noncompete suit. The new company will either indemnify the worker, or (far more often) drop them as not worth the hassle, and take their #2 choice.

The legislation needs to change. The situation as it stands is ripe for barratry and bullying.

I know at least one person who joined a Michigan startup, moved over, got sued by non compete, and the new employer just didnt want any hassle and laid them off. This person had to leave country then.

The take home is dont take tech jobs in states where non-compete clauses are still legal.

> 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.

The first part is probably usually true, because places where non-competes are enforceable generally will not enforce them if they are overly broad.

But for tech workers there are almost always other jobs that the worker can qualify for and pay similarly to their old job but are not covered by the non-compete and then then non-competes do get enforced even though the worker is not independently wealthy.

A fairly recent example [1].

[1] https://callaborlaw.com/blog/former-draftkings-employee-lose...

I don't think this is quite true. in my industry & city, noncompetes are very common and commonly enforced.

I lost a job because of one. In nyc. Company made some threats and the offer was pulled.