Non-Competition Agreement

AAA

DEFINITION of 'Non-Competition Agreement'

A legal agreement in which one party is restricted from working as a direct rival to the employer for a specific time and place. The purpose of non-competition agreements is to prevent an ex-employee from exploiting resources, knowledge and/or leads that were gained from a previous employer.

INVESTOPEDIA EXPLAINS 'Non-Competition Agreement'

The likelihood that authorities will enforce a non-competition agreement can vary depending on state laws and whether the courts feel that the restriction is reasonable. For example, a one-year restriction for a salesperson may be considered reasonable, as there is the threat that the salesperson may use leads gained from his or her old job. However, a one-year restriction for an engineer working in a high-tech field may be unreasonable, because the fast-paced nature of the field could render the out-of-work engineer's knowledge obsolete.

RELATED TERMS
  1. Perfect Competition

    A market structure in which the following five criteria are met: ...
  2. Trade Secret

    Any practice or process of a company that is generally not known ...
  3. Competition In Contracting Act ...

    A policy established in 1984 to encourage competition for government ...
  4. Industrial Espionage

    The theft of trade secrets by the removal, copying or recording ...
  5. Comparative Advantage

    The ability of a firm or individual to produce goods and/or services ...
  6. Monopoly

    A situation in which a single company or group owns all or nearly ...
Related Articles
  1. Personal Finance

    A History Of U.S. Monopolies

    These monoliths helped develop the economy and infrastructure at the expense of competition.
  2. Personal Finance

    Antitrust Defined

    Check out the history and reasons behind antitrust laws, as well as the arguments over them.
  3. Professionals

    What are the main goals of human resources planning?

    Learn about human resource planning, a business strategy that heavily incorporates workforce considerations into long-term objectives.
  4. Professionals

    How are labor demand forecasts made in human resources planning?

    Discover how human resource planning might be used to estimate the correct demand for labor in a given market, both qualitatively and quantitatively.
  5. Professionals

    How do companies measure labor supply in human resources planning?

    Find out how and why a company's human resources department would measure labor supply, and what policies would address a shortage or surplus.
  6. Professionals

    How do fringe benefits help increase employee retention?

    Offering fringe benefits can be a valuable retention tool for employers wanting to maintain a high-quality, highly productive staff.
  7. Retirement

    Are part-time employees eligible for fringe benefits?

    Learn how offering fringe benefits allows employers to entice new talent to join their teams, although part-time workers do not often get these benefits.
  8. Professionals

    How do you protect yourself against sudden unemployment?

    Learn the steps you can take to protect yourself from unexpected job loss and how you can turn a potentially desperate time into a career opportunity.
  9. Insurance

    How do you financially prepare yourself for unemployment?

    Lean some simple ways that you can financially prepare for the possibility of unemployment. Read information for saving money and avoiding debt.
  10. Personal Finance

    What are the top trends in corporate social responsibility?

    Learn about top trends in corporate social responsibility. Companies are increasing transparency, innovating, investing locally and addressing inequalities.

You May Also Like

Hot Definitions
  1. Command Economy

    A system where the government, rather than the free market, determines what goods should be produced, how much should be ...
  2. Prospectus

    A formal legal document, which is required by and filed with the Securities and Exchange Commission, that provides details ...
  3. Treasury Bond - T-Bond

    A marketable, fixed-interest U.S. government debt security with a maturity of more than 10 years. Treasury bonds make interest ...
  4. Weight Of Ice, Snow Or Sleet Insurance

    Financial protection against damage caused to property by winter weather specifically, damage caused if a roof caves in because ...
  5. Weather Insurance

    A type of protection against a financial loss that may be incurred because of rain, snow, storms, wind, fog, undesirable ...
  6. Portfolio Turnover

    A measure of how frequently assets within a fund are bought and sold by the managers. Portfolio turnover is calculated by ...
Trading Center