Hyperthread, the situation that you have mentioned is quite different than what United7 has mentioned. His case sounds like a direct relationship. If the relationship is indirect and if your employer can not establish a business relationship with the client company, he will be fine. However, if the employer establishes that there was a business relationship with client and if it establishes that the employer has to give up the revenue it was making from that client due to his joining the client company, he could be in problem. I was googling a little bit about it and found out that in California a non-competition contract is void. If that is the case, he is still fine but you need to find out the law in your state.

Just to answer your question whether he has to be a slave of dhoti company, he does not have to be like that. He can leave anytime he wants but he can not take away the business of his present employer by joining his client company. It is related to just one company that you have been working for as a consultant. You can leave for other millions of companies. I am trying to explain the non-competition contract to the extent of my knowledge as a business student and professional. It is not a legal advice.