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HR Compliance

Non-Compete Clause

A contractual restriction preventing employees from joining competitors after leaving.

Full Definition

A non-compete clause (also called a restrictive covenant) is a provision in an employment contract that restricts an employee from working for a competitor or starting a competing business for a specified period and within a defined geographic area after leaving the organization. To be enforceable, non-compete clauses must protect a legitimate business interest, be reasonable in scope and duration, and go no further than necessary to protect that interest. Courts in many jurisdictions are reluctant to enforce overly broad non-compete clauses.

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