Most of the cases I have seen in which exiting employees were able to destroy their former employers more or less overnight (which strikes me as the universe in which noncompetes are salutary) fall into two categories:

1. Senior managers or owners capable of replicating the entire operation and effectively transferring the former business en masse, either because of their own client relationships or because of their relationships with other key employees, and

2. Key client-facing individuals in fields where their expertise or relationships drive client loyalty.

Say your job is wholesaling cardboard. That's a commodity, so people are going to buy it based on (1) price, (2) logistical efficiency, and (3) relationships. If everyone in your region knows you a the guy who gets them their cardboard on time, it doesn't take much for you to put a new company name and phone number on your POs and walk out the door with all of that business.

Now, it's totally different if, say, you just deliver the cardboard and nobody really cares who you are.

The company isn't really worth that much, it's just the person who has that worth. That person could give the company some value by binding themselves to employment for a term of years with specified damages in the event of breach.

If a manager or owner is capable of replicating the entire operation that easily, I'm unclear why the company should be privileged over the manager or owner.

It's usually (as others have pointed out) because the owner sells his interest in the company to someone, which strikes me as a pretty good reason.

is not all that valuable unless the company has the owner in an employment contract -- that contract is where the negotiation should be, and contemplation of liquidated damages seems appropriate in these cases moreso than a prohibition against competing whenever the owner actually departs.

There are plenty of circumstances where a company is perfectly viable following an owner's (or co-owner's) departure, provided the former owner himself isn't out there competing.

And in the owner context, the problem isn't keeping him from departing (who, exactly, is the owner going to make that promise to whilst he's still the owner), it's keeping him from changing his mind after he voluntarily decides to depart.

for the business and structure the buyout differently, rather than shackle with a noncompete. It can achieve the same ends via different means.

Owner buyouts in small businesses aren't usually adhesion contracts drafted by the buyer.

Edit: And it's wishful thinking to assume that structured payouts will generate the same protections as a restrictive covenant in every case. If the seller concludes he can undersell his old firm, it could certainly be economically rational for him to get back in the game and forgo the later installments. Whether he can do that consistently with tort law and the Lanham Act depends on the circumstances, but contracts allowed parties to avoid a lot of indeterminability and uncertainty on those questions.

by this on multiple occasions, and my spouse has been on both sides of it.

I am not understanding why a buyer of a small business might not be able to structure the buyout in such a way to protect their interests rather than including a non-compete clause. If you care to explain it in simple terms so that I can follow along I will be happy to learn. That's not snark, I really would be happy to be enlightened.

employee to stick around. The non-compete is used to shackle them to the business.

What company resources were used to build that clientele? A business should be able, at some level, to protect their investment.

I'd have no issue with a company requiring a non-compete when they've paid for school or other training.

to exploit the rule to their advantage, rather than simply protecting their investment. They can and should protect their investment via other means. Non-competes are unnecessary. I understand circumstances listed where they might be of more use, but I have zero trust that they will not be abused. Businesses can and should find other ways to achieve their ends. If that costs them, I am unsympathetic. Their actions led to this outcome.

Supposing that an electrical company takes on unskilled workers to provide them with apprenticeship training, truly investing in their. Before investing a bunch of time and resources into this training project, the company might reasonably want some assurances that they'll get an ROI.

Both the company and the potential trainee are likely better off if the trainee can be prevented from leaving for a competitor immediately after the training is complete, as the trainee would receive the benefit of the on the job training, and the company would receive the benefit of reduced turnover if they invest in such training. As a general matter here, the entire industry would also likely benefit, as on-the-job training would likely be more beneficial than school-based training, so all companies would eventually have more, better-trained workers.

The incentive to train the employee well is in the best interest of the company regardless if the employee can leave. The ability to retain the employee is almost always within the control of the company by offering sufficient compensation, benefits, and culture, without the need to contractually prevent the employee from leaving. Sometimes employees leave, but more often than not whether they leave is within the company’s control.

That is, certainly there's the potential for abuse, given subjective debates about what constitutes robust enough training. There's obviously real costs to taking on an untrained apprentice, and fully training them up in terms of both time, lost productivity, etc... But rules put in place to provide exceptions here could be gamed by employers to put in place sham training programs that don't require that much effort solely as a way to lock in new hires and depress wages.

I don't agree that the incentive is always there for the company to train well. There's an incentive to free-ride, not put in the effort in training, and then go poach employees with slightly higher pay because you don't have the underlying costs associated with training.