Its possible in theory for employers to offer additional pay to work in conditions wherein the employee will be slowly poisoned where such additional pay is cheaper than proper safety equipment. Its even possible that the employer will find people dumb/ignorant enough to take this it doesn't mean its reasonable economically for the society to allow this sort of transaction.

Your earlier scenario made no sense as their would be no reason to suspect that the 2 employers respective pay and conditions were related you have just presented it as such. Imagine the law were changed tomorrow? Would the high paying non compete using employer suddenly start paying smaller wages? Would they have any employees tomorrow if they did? A freer labor market would be MORE competitive not less there is no reason to suspect that they wouldn't have to pay more not less to retain the same talent.