I've never fully understood the market failure here.
Let's assume no Monopsony. Let's assume no collusion by employers, since this is explicitly illegal, indeed it did happen, but the tech firms were slapped on the wrist for it.
Why do employees not attempt to strike out those portions of their contract? Why does no entrepreneur create a tech company with one of the innovations being a no "non-compete" clause and using that to woo employees?
My guess is that employees do not actually dislike non-complete clauses that they would accept a lower wage in compensation for no "non-compete".
* Lack of laws. Non-competes should be treated as an exclusive employment by the company, to expressly NOT work on any of the covered topics. They must be funded.
Who has more "power" in the arrangement seems to be a function of the business cycle. Employees, in tech (we are on hackernews), had far more power 1-2 years ago.
Why does there need to be a law here? Why don't employees say: "If you want a non-compete you have to pay me $X/hr more" or conversely if non-competes are common : "you can pay me $X/hr less if there is no non-compete".
That this doesn't happen, and that there isn't a wiley entrepreneur out there figuring out that "if everyone would take X less for non-compete job, I'll offer then X/2 and make bank!". Since this doesn't happen, this means that employees don't care much at all.
Let's assume no Monopsony. Let's assume no collusion by employers, since this is explicitly illegal, indeed it did happen, but the tech firms were slapped on the wrist for it.
Why do employees not attempt to strike out those portions of their contract? Why does no entrepreneur create a tech company with one of the innovations being a no "non-compete" clause and using that to woo employees?
My guess is that employees do not actually dislike non-complete clauses that they would accept a lower wage in compensation for no "non-compete".