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Global Work Glossary

Lost in a maze of global employment jargon? Find your way out with our handy collection of work and HR terminology

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Non-compete agreement

What is a non-compete agreement?

A non-compete agreement is a legal contract that restricts an employee from working for a competitor or starting a similar business for a specified period of time after leaving their current employer. The purpose of this is to protect an employer’s property, client relationships, and trade secrets and to prevent employees from using insider knowledge to help another business.

Non-compete agreements are particularly common in industries where employees have access to sensitive information such as technology, finance, and sales. And, depending on the severity of the case, the circumstances involved, and the location of the company, breaches can result in legal consequences such as payments for damage.

While these agreements are valuable tools for protecting a company’s interests, employers must draft them carefully to ensure they are justifiable. In many cases, non-compete agreements are deemed unreasonable and not enforced.

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