I have been working full time for my employer for over 7 years in a combination job. My job description is about to be cut in half, leaving me with one part-time job. My employer tells me I cannot take a job in the geographical area that will replace the half I am losing. If he is no longer using my services in this capacity, and in view of the fact that I have no contract or signed agreement, can he stop me from working at the job I know for another employer under these circumstances?

If there is no signed non-compete agreement, no, he cannot stop you from working for another employer. It is legal for you to work for two employers at the same time.

However, if he fired you because you took a job with another employer, that would be legal too. The law does not require him to keep you employed if he feels that your second job creates a conflict of interest.