(FORTUNE Magazine) – When the economy was booming, "lots of companies took away their noncompetes because they couldn't attract people," says Larry Lorber, a partner at Proskauer Rose. "Now it may be a different situation."

What is a noncompete?

In a noncompetition agreement (or covenant), you promise not to compete with your former employer for a specific period (usually a year or two) and within a particular geographic or business area.

What does "compete" mean?

A standard noncompete prohibits you from being an employee, consultant, officer, director, owner, lender, principal, agent, dealer, partner, distributor, representative, contractor, broker, or trustee of a competing firm. Some even prohibit you from investing in a competitor.

When does it get signed?

Generally before beginning work, as part of the employment contract, but employers can also ask that you sign one during a job, or upon termination in order to get (or enhance) a severance package. Last November, however, a California court awarded a former Aetna employee $1.3 million after she was fired for refusing to sign a noncompete agreement.

Are they enforceable?

It depends on the wording, and it depends on where you live. The spectrum runs from employee-friendly California, where noncompetes are pretty much worthless except during the sale of a business, to Illinois, which favors employers. (Some companies will even fly employees to an office in Illinois to sign employment contracts.)

"There's a lot of misinterpretation," says Paul Tobias, senior partner at Tobias Kraus & Torchia in Cincinnati and founder of the National Employment Lawyers Association. "Some employees are scared to death, and they shouldn't be. Others think noncompetes aren't enforceable, and they are." Check with a local lawyer. Don't expect your company to explain it; after all, the noncompete is there to protect it. And you shouldn't rely on recruiters. "I wouldn't want them as my sole source of advice," says Lisa Nass, a former recruitment consultant who is now a career counselor.

Even a toothless noncompete can leave scars. Some companies in California still ask their lawyers to put noncompetes in employment contracts. Why? "Although they aren't enforceable, which many savvy employees ascertain, it doesn't stop a deeper-pocketed employer from litigating," says Manhattan-based lawyer Lorraine Ahlers-Mack. Your former employer may get an injunction preventing you from working until the court weighs the reasonableness of the agreement. This might be done simply to tell other employees that the company is tough on noncompetes; meanwhile you're forced to litigate the matter without a salary to fund your defense. Because of that, most employees simply assume the noncompetes are enforceable, and they're too scared to go to a competitor.

Are they negotiable?

Yes, generally in terms of length of time and geography covered--an employer may limit the scope of a noncompete to the business or state that a person is in. But beware: Noncompetes can prevent you from joining a business that your former employer didn't engage in but plans to enter. (This prompted a legal tussle last year between Amazon and eBay.)

Can one be altered after it's signed?

Yes. By a process called "blue-penciling," a court can limit a noncompete's geographical scope or duration. It's in a company's best interests to write a reasonable and enforceable noncompete, and yet that's not always what it does. One East Coast management consultant says his firm recently reduced the duration of its noncompete from two years to one after realizing two years was too onerous.

Is a noncompete voided if I'm laid off?

No such luck. It's one of the provisions that survive the termination of an employment contract, says Harvey Moore at Bidna & Keys, based in Newport Beach, Calif.

Will my new employer help me if my old employer invokes a noncompete?

It may, but don't count on it. Smart employers will specifically ask a prospective employee if she is bound by a noncompete at her current company. Says Tobias: "Some will back away if they see it's going to be a fight."

Are they even necessary?

Probably not. Companies fearful of employees walking out with valuable information can protect themselves with nondisclosure and nonsolicitation agreements, which courts generally favor. Many California lawyers are already writing such agreements for their clients. "Over time people became more aware that [noncompetes] weren't enforceable--that's why we had to find a different approach," says Moore. Robert Stein of Stein & Lubin in San Francisco agrees, and says noncompetes should only be used when an employee has an ownership stake. "In most cases, like for middle managers, noncompetes are inappropriate." In fact, he says they can be dangerous for employers, citing the Aetna case. So perhaps noncompete agreements, which date back to the days of masters and apprentices, will also become a relic of the past.

--Matthew Boyle