noncompete clause

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noncompete clause (plural noncompete clauses)

  1. (law) 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.
    • 2005, Jay Greene, "Microsoft Sues over Google's Hire," Businessweek, 21 July (retrieved 22 Sep 2010):
      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.
    • 2009, Ron Gluckman, "Bill's Excellent Adventure," Forbes, 5 Oct. (retrieved 22 Sep 2010):
      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.