Companies do that. I heard it is virtually impossible to enforce; somebody even advised me: "just forget it". I also know that many papers you sign with business in real life are not legally meaningful, because some legislation can take precedence. Indeed, I hardly can imagine the term "competing" can be strictly defined and applied to each case. Also, there is a "reasonable restriction on employee's ability to earn a living", that is, the plaintiff should show that the employee would be able to earn for living despite of non-compete covenant. How anyone could proof such thing?
Nevertheless, let's look at the legal situation: the law defines where is can be enforced; and it depends on the country and state (you work in US, right?), see
http://en.wikipedia.org/wiki/Non-compete_clause[
^].
Violation of someone's intellectual property is completely different thing, of course; the lawsuit is quite possible here (
http://en.wikipedia.org/wiki/Intellectual_property[
^]).
Disclaimer. I not an expert in this topic and cannot assume any responsibility for the information I just shared. This is no more that my private opinion on the subject.
—SA