I can't think of a single real-world situation that would be improved by having noncompetes enforced. Can you?
XCo. is about two years ahead of the rest of the world in their widget technology research. They'd like to hire a new product designer, but they know that the information this designer would need to do his job is worth millions to any XCo. competitor. They would like to hire someone they already know and trust, but they've pretty much tapped out their immediate social network. So they stipulate that if you work for XCo, you can't work for Y LLC or Z LP over the next two years.
This is an interesting example. But to take the question further, exactly what choices do you allow an individual to trade away? As an extreme, will you allow an individual to trade his life away(or as in The Merchant of Venice, one pound of flesh), if it can be used in some way to obtain a better contract from someone else? In the poorer parts of the world, people sometimes sell themselves into slavery.
The options here are either A)the extreme position - an individual is free to make any contract whatsoever and is henceforth bound by that contract(the government is the enforcer), or B)there is a set of fundamental freedoms which one can't freely trade away.
Are you advocating A or B? If B, one would need to find some basic principles which determine what freedoms can't be given up voluntarily.
I don't think you can properly claim to own your own life if you aren't able to relinquish that ownership -- the obvious question is: if you don't own it, who does?
I am advocating A), in the sense that I would prefer to be governed under a judicial system that focuses on enforcing the promises I make, not making my decisions for me. The nice thing is that B is a subset of A -- under A, I could put some of my rights (the right to sell my life, the right to harm myself, the right to agree not to take a job in the future) under the control of a legal entity that prevented me from exercising it. Since anyone under A can live as if they were under B, advocating B over A can have no effect but to deprive people who do prefer A of their freedom.
Your version of B is actually distinct because it still requires the individual to explicitly limit his choices beforehand. It would still leave open an option for the following to happen,
A farmer after a poor harvest faces the prospect of starving to death, goes to a local landlord for money in exchange for which he becomes a bonded labourer for life. The next season he tries to run away. But the government, which operates under principle A, catches him and forces him to return to slavery.
I am uncomfortable with the government actually doing this and this is why i reject A.
There is an argument made in the context of minimum wage that it actually hurts the people whose work value is less than the minimum wage as employers wont hire them anymore. I am not arguing for or against minimum wage, but want to point out a counterargument which might work in the example given above.
When the landlord knows that if one person refuses slave labor in exchange for money, he can hire some else. But with a law forbidding such contracts in place, the landlord doesn't have this option. In effect, the law enhances the bargaining power of the labourer by restricting his options.
In effect, this is the same as the as argument pointed out in the thread above of there being a Prisoner's Dilemma.
I think, in practice, that your example still doesn't work.
First of all, that's an argument against not divulging trade secrets, rather than forbidding the worker from working in the same general field. There aren't a lot of cases where somebody can reproduce an important new product from scratch without bringing over mountains of documentation.
If somebody can take the bare idea, go to a competitor, reproduce a product, and get it out to market faster than the original company, then the previous company was probably doomed anyway. This does happen from time to time but let's face it -- this is a GOOD thing.
XCo. is about two years ahead of the rest of the world in their widget technology research. They'd like to hire a new product designer, but they know that the information this designer would need to do his job is worth millions to any XCo. competitor. They would like to hire someone they already know and trust, but they've pretty much tapped out their immediate social network. So they stipulate that if you work for XCo, you can't work for Y LLC or Z LP over the next two years.
Or they could not hire someone.