Definition
A contractual agreement restricting an employee or business owner from competing with the employer after leaving. It's basically 'you can leave but you can't go work for the enemy.'
Example Usage
The employment contract included a covenant not to compete, preventing the employee from working for rival companies for two years.
Origin
From 'covenant' (a binding agreement) and 'compete'
Fun Fact
Courts often strike down non-competes if they're too broad (covering too large an area or too long a time period) or seem designed purely to prevent employment
Source: Employment and contract law terminology
Related Terms
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See “Covenant Not to Compete” in Corporate Speak, Gen-Z Slang, Pirate Speak, and more.
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