A covenant not to compete, also known as a non-compete agreement, is a contractual arrangement in which one party agrees not to engage in certain competitive activities within a specified time period and geographical area after leaving their current employment or business relationship. These agreements are commonly used to protect a company’s trade secrets, confidential information, and goodwill by preventing former employees or business partners from competing directly with the company or using proprietary knowledge gained during their employment or partnership to benefit competitors. Non-compete agreements must generally be reasonable in scope, duration, and geographic coverage to be enforceable, and their validity may vary based on jurisdiction and specific circumstances.
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This glossary post was last updated: 29th March, 2024.
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