[JamesBarney]

No it's much worse than this. They never threaten the employee. They threaten the company hiring the individual. The employee might take it to court(and it most states win), but the hiring firm has no incentive to do so, and just moves on the next candidate.

They don't have to sue, they just have to send a letter to the new firm. Or even worse the new firm just has to ask "did you sign a non-compete?"

[amerberg]

Yes, this is exactly how it works. Well, in my experience my CEO threatened me and the new company. I was actually given the choice between a lawsuit and a promotion (with a salary that was almost competitive with the new company) in the course of a single conversation. I chose to stand by my resignation because I'd been very unhappy there and it wasn't going to get any better if I showed them that I could be bullied into line.

I suppose I was lucky that the new company tried to negotiate a bit, but when my former employer refused to budge, they backed out. My lawyer had warned me that this could happen even before I accepted the job offer, right after he assured me that I would be on solid legal ground in taking the job. Admittedly, I didn't really think it would happen because why would they want to be known as the kind of company that does that? Even so, I've never regretted my decision to leave. As stressful as that was, staying would have been worse.

[hawaiianbrah]

Huh. But the hiring firm didn’t sign the non-compete, so how does the first company go after the second?

[JamesBarney]

They threaten them with a tortious interference lawsuit which is defined as "intentional interference with contractual relations, in the common law of torts, occurs when one person intentionally damages someone else's contractual or business relationships with a third party causing economic harm"

This is the reason why employers ask if you've signed a non-complete