noncompete clause

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