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Comment by lumb63 | Hacker News Reader

Maybe those companies wouldn’t have existed without noncompetes, and not have provided those employees with jobs. Would you invest a large sum of money to build a site and hire a team if you knew it could not only vanish but also be turned against you at a moment’s notice? Surely the situation where employees have noncompetes is worse than the situation where there are fewer jobs because noncompetes don’t exist?

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Would you really want to create a company where the only reason employees stick around is that they literally aren’t lawfully allowed to work anywhere else? An alien, yet common mindset.

I would not.

On the other hand I have no idea how to deal with a situation where a small tech company develops some highly specialised expertise in house only to have all their employees poached over night by a far bigger competitor that can pay them a salary or signing bonus that would be uneconomical for the smaller company to match.

How would you discourage this kind of hostile takeover?

A small company handles that by offering equity to the critical employees and having them share in the success of the company.

Also, intellectual property and a stiff legal budget.

Be a better working environment?

Prohibiting someone from competing with you is not at all the same as forcing them to work for you. Furthermore, if an employee doesn’t want to be subject to a noncompete agreement, they could just…not work there? Also, non-competes don’t prohibit working anywhere else.

Surely noncompete clauses are mainly to allow companies to treat their employees poorly, knowing that they won't be able to get a job elsewhere. The alternative to having noncompetes is to value and reward your employees sufficiently.

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