> Banning noncompetes would be inconsistent with Texas’ principles and reputation as a defender of free markets. Noncompete agreements are restrictions on the free movement of labor; they gum up markets.
> Ultimately, the market is more important than the prerogatives of any particular company.
In a multi-turn game, company A which uses non-competes would have to offer something else in exchange to be preferred (or equal) to company B which does not. Employees who then accept whatever that was are indeed bound by it when they want to consider moving to companies B, C, or D, but I see all of those as market actions.
If some employees take jobs without thinking about their future position, I’m not convinced that’s a widespread market failure. I’ve asked about and read IP and non-compete clauses at every role I’ve ever taken before accepting the position. Only once has it affected my choice; several times I had to negotiate redlines in the documents (which went smoothly as both sides were being reasonable).
The reason I'm thinking about this is because unless another comment above, I've seen non-competes pretty often. And I also had to negotiate redlines. I didn't think about this early in my career, but then I changed employers... and ended up sued. The new employer paid for a lawyer and it was largely non-issue, though at my age, I found it a very harrowing experience (and an education.) Many hopefully won't get that same experience, but they may also lack the education or wisdom to negotiate around non-competes. In the physical world, some non-competes would essentially require you to pack up and move if you want to remain in the same line of work. That's great for a company, and terrible for talent. Remote work would eliminate that particular effect - assuming non-competes were still worded around physical geography. But a well-worded non-compete that applies universally could very well tie someones hands - either leave your line of work, or stay with the employer that now owns you.
All "free market" theories emphasize individual choice, and they all rely on individuals having the ability and information to make those choices. But non-compete (basically the exact phrase meaning to eliminate competition and therefore choice) agreements tend to be giving companies the power to remove choice from individual employees. So while theoretically a "perfect" market would result in all employees mindfully rejecting non-compete and choosing incentives wisely, this would seem to fall into a similar category as other "big business, big lawyer team" situations, where the advantage lies clearly with those in power, not individuals trying to have and make choices.
Laws against monopolies, and attempts to prevent propaganda and misinformation that take choice away from individuals exist as a check against power imbalances that remove freedom from markets.
Non-compete enforcement is largely pro- or anti-labor, but even that is a little disingenuous because non-competes also prevent companies from hiring labor with specific expertise. Whether they are enforced or not, the labor market will gradually shift to accommodate either position. If the market can adjust prices in response to some event, then it is a free market.
It may have low taxes, but Texas is the furthest thing imaginable from a small-government state.