They are actually permissable in circumstances similar to John Carmack's:

> California employers can sidestep non-competes in the following instances:

> EXCEPTION 1: If the employee sells business goodwill

> EXCEPTION 2: If the owner sells his or her business interests

> EXCEPTION 3: If the owner sells all operating and goodwill assets

> Upon the business’ dissolution, a member of the company may agree to a non-compete if operating a similar business in the geographic area. Goodwill is the company’s name and brand reputation. Employees with stock options are not considered company owners for purposes of non-competition agreements.

https://www.contractscounsel.com/b/non-compete-california

He lives in Texas still

There is when equity changes hands, which will have been the case with Carmack.

No. Everyone is given equity in Silicon Valley.

See x3n0ph3n3's comment upthread.