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There are some jobs (for example as referenced elsewhere hedge funds) where employees have knowledge that could be directly damaging to their former employer if it were taken to a competitor.

For example, other Fund X has a huge short position in a company. The way that finance solves this is by paying employees to stay unemployed (and not take their potentially damaging information elsewhere).

There isn't really anything directly "in it" for workers, so paying them out for their time seems reasonable.




So why not make it generally illegal except in very specific circumstances?


Or how about allow for knowledge of one firm being shared with the other being illegal since it’s proprietary (I think this is probably already the case).


That's very hard to police and prove. It's easier if you pay them to be unemployed for long enough for their knowledge to be less valuable. This is very common with businesses like hedge funds. But I agree non-compete should be narrowly allowed and only in situations like this that are more equitable.




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