I think it's reasonable to say that you can't compete with your employer, without drawing their legal ire, while you work for them. The flip side of it, at least in California, that it's very difficult for an employer to keep you from working on whatever you want for whoever you want (as long as you're not actually infringing on their IP or running off with their trade secrets), once you are no longer employed by them. The examples of this are legion - HP didn't sue Wozniak after he left to invent personal computers. Same for everyone who leaves Google or Facebook or Apple to pursue some idea of their own. "Former employer sues budding entrepreneur" is a story you almost never hear.