Eli5: how exactly can companies enforce non-compete contracts? How is it their business what company you go to, and how would they even know?
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As you’ve seen from the other answers, it varies widely.
The ones I’m most familiar with are professional contracts. Lawyers, doctors, veterinarians. I have passing familiarity with these contracts for sales positions, but I don’t typically get to read them.
The first thing to note is that the clause absolutely cannot prevent you from earning a living commensurate with your level of training and education. So a clause preventing a heart surgeon from opening their own practice anywhere in the country would be absolutely unenforceable. But preventing them for opening a practice within 150 miles of their current employer for the next two years certainly would be. Even going to work for a competing practice within 150 miles can be enforceable.
For sales positions, the usual provision is that you can’t contact anyone on (some subset of) their current client list.
The other area that is typically subject to a non-compete is if you have access to trade secrets. This is a lot more “iffy”. If you’ve been researching coal gasification for Shell, for example, does that mean that you can’t also research coal gasification for Exxon? Or only that you can’t research it using the same methods you were researching at Shell? Similarly, if you’ve been working on self-driving cars for Tesla, you can’t do self-driving cars for GM? I think that would get laughed out of court. (But I can’t guarantee it.) You can’t do it using the Tesla patents and software? That could very well fly.
Something that amazed me, one of my wife’s acquaintances in the UK couldn’t work anywhere for 2 years after he was let go. The term for this is “gardening leave”. He had to live for 2 whole years on only his salary, with no stock options. I don’t know what the arrangement was for annual bonuses.
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