Generally this is covered under a confidentiality agreement, which forbids the disclosure of the company's intellectual property. The designs you mention in your example would be considered work-for-hire, and (depending on how specific/proprietary they were) if you sold them to a competitor on the sly, you might be in violation of such an agreement.

So no, a noncompete - even one that only applies to the time you are employed by the company - isn't typically necessary.

Noncompetes are very common in finance because employees will gain access to proprietary knowledge (trading algorithms, signals, clients, strategies) that by definition have very high short-term (months to a year) value to a competitor.

Confidentiality doesn't work that well because proving that a former employee disclosed proprietary information is very difficult.

However, the ex-employee is generally paid at full salary for the time that they're unemployed, which seems like a very fair arrangement all around.

Usually when they really give a shit about the non-compete in finance, there's a term contract.

My friend did commercial banking. He had a one year non-compete, but it was geographically scoped, and he also had multi-year contracts that protected him from layoff. They needed to release him for specific causes, buy out the contract, release his contractual obligations, or some combo.

Another model I've seen is that everyone gets a blanket noncompete, but when the employee leaves, the business and legal folks get together and decide whether they really want to pay for the person to be unemployed.

Usually it depends on the exact new position, whether it's at a direct competitor, how senior the person was, etc.

Extremely difficult to enforce, depending on the nature of the designs. Cf. the Waymo case for an example of an easier-than-average, but still difficult, case to enforce.

Agreed. It's all a negotiation, though, and from the perspective of the employee you're going to want to present the confidentiality agreement (and possibly a term-of-employment noncompete) as sufficient to ensure your loyalty. You should under no circumstances agree to anything that restricts your options after term of employment.

However, many software firms have no issue with selling the development of a feature to customer A, and then selling a license for said feature to customer B. This is the same situation as selling the skills acquired at employer A to employer B. Why is it ok for employers to do this, but not for employees?

> Why is it ok for employers to do this, but not for employees?

Why is the politico-economic system called "capitalism" and not "laborism"?

It is much more than that. An employee sells not skills, but time of his life, the only one he's got. A company can make million sales, an employee can't work a million jobs.

If I'm implementing literally the same stuff at the same time then I bet that's a massive copyright violation.

You have to take pains to avoid contamination when reverse engineering a product, for example, and that doesn't even involve the original staff.

Seems that your argument could also be used to justify lifetime noncompetes. If I work for a company, gain experience, then go work for another company, they're getting the benefit of all of that experience without having to pay for the years it took to obtain it.

But your next company is getting your prior experience, which becomes more out-of-date every day, not your up-to-the-minute experience on what might be an actively competing project.

doesn't negate the problem stated as whatever the experience is, it's value is non-zero. Hence the benefit to later employers is also non-zero (could be argued) at the cost of earlier employers

the problem is more specific than the second employer getting non-zero value. It's getting ongoing value, under the table, direct from a present competitor -- harming the relative competitiveness of the first employer.

The value of this, of course, depends very much on the specific industry and project. It doesn't really matter if your guy who builds generic websites for your clients also builds generic websites for a competitor's clients. That doesn't materially hurt the first employer. But it can matter a lot if your guy who you are paying to develop cutting-edge algorithms is deploying those algorithms to the competitor you're trying to beat. Instead of gaining an edge worth $X per year, your company instead gains only part of that advantage because at least one competitor is cutting into it.

There's a huge difference between double dipping and signing away your right to work. Why is common sense in such short supply?

However that's an insufficient argument for non-compete. The non-compete would prevent that, but also would prevent something much more reasonable.