A
non-compete clause (often
NCC), or
covenant not to compete (
CNC), is a term used in
contract law under which one party (usually an employee) agrees not to enter into or start a similar profession or trade in competition against another party (usually the employer). Some courts refer to these as "restrictive covenants." As a contract provision, a CNC is bound by traditional contract requirements including the
consideration doctrine. The use of such clauses is premised on the possibility that upon their termination or resignation, an employee might begin working for a competitor or starting a business, and gain competitive advantage by exploiting
confidential information about their former employer's operations or
trade secrets, or sensitive information such as customer/client lists, business practices, upcoming products, and
marketing plans.