noncompete clause

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 July 21, Jay Greene, “Microsoft Sues over Google's Hire”, in Businessweek, retrieved 22 September 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 October 5, Ron Gluckman, “Bill's Excellent Adventure”, in Forbes, retrieved 22 September 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.