Meaning of noncompete clause | Babel Free

Definitions

A provision within a business agreement or employment contract which stipulates that the contracting party must abstain from competitive practices not in the interests of an identified firm, such as starting a competing business or accepting a job with a competitor, and often extending for a period of time after the termination of the original employment or other business relationship.

Examples

“Lee is just one of a series of execs who have bolted slow-growing Microsoft in the last year for the bright lights of Google. . . . Microsoft turned to its lawyers, accusing Lee of violating his noncompete clause.”

“When Pizza Hut's owner, Tricon (now called Yum Brands), tried to revise his franchise agreement in 1999 to put in a noncompete clause stipulating that Heinecke needed permission to operate other food businesses, Heinecke, who by then already ran a number of fast-food chains, sued for breach of contract.”

CEFR level