When organizations use non-compete agreements, they often refer to written contracts between employees and employers that require a signature. In addition, these contracts state the employee can’t enter into competition with the employer when the employee leaves the company.

When an employee and employer relationship ends, non-compete agreements tend to be a requirement of employers. The goal of the agreement is to prevent competition against them in the employee’s next position, for example:

• Working for a competitor in the same market.
• Starting up another business in the same field.
• Recruiting the company’s employees to leave with them. 

Employers may use these agreements to protect themselves from previous employees revealing:

• Company secrets.
• Private company information.
• Company operations.
• Client information.
• Company pricing.
• Company strategies, etc.

Non-compete agreements typically last a specific time frame following the employment relationship termination. These dates are typically set within the agreement.

A non-compete agreement has to include certain information in order for it to be legally binding. This includes: 

• Effective dates.
• Reasons for the written agreement.
• Dates for when the employee will be barred from working in a competitive sense. 
• Details as to how the non-competing party will receive compensation for agreeing to the terms. 

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