> taking any kind of IP and running away with it, which would basically kill the industry
How do you get from 'taking IP' to 'killing the industry'?
The free flow of ideas and techniques is what drives technology and industry.
Correct, sort of. There is the concept of running away from intellectual property (say, you work on Coca-Cola, and you run away with patented/secret drink recipes and formulas, and go work with PepsiCo or make your own company. This is obviously stealing IP property. Non-compete agreements do nothing of the sort to prevent this, and there are already Federal and State laws to deal with such situations.
Similar laws and situations arise when, for example, a employee at, say, an insurance company, takes contact information on the company's clients, and leaves to make a competing company, using company-owned client information to poach those clients. That is unethical (and possibly unlawful). An ideal non-compete should be aimed at preventing that.
Sadly, non-compete agreements have a greater, nefarious scope: Non-compete agreements are of a complete different sort - you work at an insurance company and you leave to create your own. Then your former company comes to sue you out of work, forbidding you from establishing your own company in the same metropolitan area/county (or state!).
This is the type of non-compete agreements that should be illegal, or at the very least be time-limited (say, 6 months) instead of being open-ended. And these are not limited to tech companies mind you.
Names and locations omitted for obvious reasons:I know of a person who was a professional dancer in his country of origin, came to the US and continued training (and working) at a local dance school.
Being the young, inexperienced foreigner that he was, he signed a non-compete. When it was time to finish his training, he decided to open up his own school on a different area of the metropolitan area he and his former school/employer resided.
Long story short: school tried to sue the living crap out of him, that he could not open up a "competing" school in the whole multi-county metropolitan area. He was being pretty much forced into a situation of forced unemployment vs change careers vs get-out-of-dodge.
Ah, America, land of the free, home of the brave... and ridiculous lawsuits, where enough money can buy you the power to shake up young, starting entrepreneurs.
Fortunately, a lawyer was able to advise him well, and a judge pretty much ruled that the dance company was in effect trying to force the young man into unemployment. Although the young man signed the NC agreement, the judge ruled that the agreement was unreasonable and illegal.
Banning such types of NC agreements explicitly is a good thing; it will stop harassing entrepreneours and former employees; and it will free judges from having to deal with such ridiculous cases