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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They enforce them by suing the person leaving for the other job, if that said job does the same things they do in certain specifics. Some areas of sales are notorious for non competes and for the most part I don’t blame them.
Look at it this way. I hire you in the copper industry. You now know how I figure my margin, where I get my product, who I sell to, and potentially lists of key contacts that I’ve spend gaining over X time.
Now let’s say you’ve found greener pastures and you want to stay in the same industry. Well now there’s a problem for me on that front. You get to take that knowledge to your new job, and not only use their tools, but mine as well. Sales is cut throat in some regards. Areas where product is a commodity and where price is always changing is tough to hold onto unless you have contracts setup.
The last part is how do I know? Trust me in certain sectors of business, everyone knows everyone. Your new job more than likely called my HR for reference of employment, so they know before your probably even hired at your new job. If not someone in those area will talk or do talk to each other already. It’s not really a secret unless they head hunt you.
I’ve seen this happen at a job I worked before. Guy worked in lumber for 20 years, wanted to go elsewhere, got sued after he went into the same industry. Now it was sales so that’s why. He knew things and his clientele he built at his previous job would’ve went with him. Our place sued and required either settlement for the business lost or he couldn’t sell in that specific industry for 5 years.
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