Non-Compete Agreement

AAA

DEFINITION of 'Non-Compete Agreement'

An agreement between two parties, typically an employee and employer, where the employee agrees not to use information learned during employment in subsequent business efforts for a set period of time. Employers usually insist on non-compete agreements because of the possibility of an employee, upon termination or resignation, working for a competitor or starting a business, and gaining competitive advantage by abusing confidential information about their former employer's trade secrets or sensitive information such as customer/client lists, business practices, upcoming products and marketing plans.

INVESTOPEDIA EXPLAINS 'Non-Compete Agreement'

In some states, non-compete agreements are extremely difficult to enforce. Some jurisdictions, such as the state of California, do not allow non-compete-clauses at all. A very popular example of a non-compete agreement dispute is the case of Kai-Fu Lee, a Google executive who used to work for Microsoft. In this case, Kai-Fu Lee left Microsoft and started working for Google within one year of a signed non compete agreement..



RELATED TERMS
  1. Material Insider Information

    Material information, about certain aspects of a company, that ...
  2. Disclosure

    The act of releasing all relevant information pertaining to a ...
  3. Non-Disclosure Agreement - NDA

    A legal contract between two or more parties that signifies a ...
  4. Confidential Treatment Application

    A form filled out in accordance with a company's 8-K, 10-Q, ...
  5. Confidentiality Agreement

    A legal agreement between two or more parties that is used to ...
  6. Copyright Infringement

    The use or production of copyright protected material without ...
Related Articles
  1. Want To Know What Disclosures Mean ... ...
    Personal Finance

    Want To Know What Disclosures Mean ... ...

  2. Can Insiders Help You Make Better Trades?
    Options & Futures

    Can Insiders Help You Make Better Trades?

  3. Digging In To 13D Disclosures
    Investing

    Digging In To 13D Disclosures

  4. Where can I find a company's annual ...
    Investing

    Where can I find a company's annual ...

comments powered by Disqus
Hot Definitions
  1. Correlation

    In the world of finance, a statistical measure of how two securities move in relation to each other. Correlations are used ...
  2. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  3. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  4. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  5. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  6. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
Trading Center