I don't think I see how this would not hurt the employees. Seems like a classic startup management move that screws over the employees who are already taking pay cuts and huge life risks to make the startup successful.
For a startup, losing a key employee is a big deal and a big risk. A non solicitation agreement doesn't prevent the employee from applying for a job at the bigger company, but merely allow the startup to be more open t o a potential competitor.
Sounds like a merit-based scenario to me.
Simply reading through HN for several years, it seems pretty obvious to me that many startups view employees and "theirs". There is no scenario where I would hurt my future opportunities simply so I don't hurt my (sinking) company's.
I owe nothing more than the agreed-upon work for money to my current company, and watching out for #1 is what has been so successful for me these past several years.
A smart developer would stay at current company if she truly believed there was a successful acquisition on the horizon. If she leaves with someone else, that's just the free market talking.
Let's say you're selling, I'm buying, and we reach a tentative agreement for $100M. While you're winding down your other options I talk to five of your key people and hire them each for $2M. The next morning I start in fresh: Without those people our new offer is $50M. By the way that's a generous offer, part of the team works for us so you're worth even less to other acquirers. And hey, what if the press got wind that you were trying to sell and your key people were leaving. Sounds like a company in trouble.
You might say that's an asshole thing that nobody would actually do but there's a reason the poster up top suggested covering it.