The government is not prohibiting non-competes, 'outlawing' contracts means that the government will not enforce them. That is all. You are free to sign anythin

The government is not prohibiting non-competes, 'outlawing' contracts means that the government will not enforce them. That is all. You are free to sign anything, you just won't be able to enforce it, but I mean, if you get a thrill up your leg forcing your employees to sign it, then by all means continue. This is like how it is perfectly legal to sign a contract selling your future labor for a fixed price. In fact, you could go do it right now with your best friend! But good luck getting the government to enforce that contract. Ultimately, this is not 'prohibiting' anything; this is just stepping out of the free market, which is a good thing. For example, saying the government 'prohibits' non-competes in this arrangement is like saying the government 'prohibits' conversion to Christianity. However, there is no law stating that a person cannot sign a contract with his pastor saying he is now Christian and will remain so until he dies. That is perfectly within both of their rights. What they cannot do is ask the government to enforce that contract, but that doesn't mean it's prohibited... it just means it's legally useless, the way non-competes should be. All that keeps these unenforceable contracts 'viable' is shame or large cultural organizations (like a church). For example, some professions start professional organizations that establish rules for members, and then the organization markets itself so that people know only to trust professionals belonging to that org (like realtors). If that org decided that there ought to be restrictions around how members conduct themselves with regards to competition and kicked out members who broke this taboo, then fine... have at it! But, the government is unnecessary ere.