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?
In: 11
Noncompetes are often “unenforceable”.
Businesses enforce contracts by lawyering up and suing you. Many contracts are more like legal wishlists, and what *actually* binds you depends on the laws and precedents in your jurisdiction.
Companies care because a common thing that happens is:
* employee works with them for years
* gets fired or leaves with privileged information (customer lists, roadmaps, git repos)
* founds (or joins) a new company doing the same thing
* shares that information about their old company with the new employer
* now the new employer has an enormous advantage. The employee is often hired into a leading role
Corporate espionage and staff poaching are *very* lucrative, and noncompete contracts do help cracking down on egregious examples of it. They’re usually unenforceable in more modest situations where there’s not a quantifiable “damage” caused, i.e. someone who works for a competitor but refrains from using privileged information.
They find out when they conduct corporate espionage (or just ordinary investigation) and see that you’ve breached the contract or that their competitor suddenly does a 180 in strategy.
Latest Answers