Browse Definitions:
Definition

non-compete agreement (NCA)

Contributor(s): Ivy Wigmore

A non-compete agreement (NCA) is a legally binding restrictive covenant designed to prevent the signee from exploiting competitive advantages gained through association with the other party in the agreement. The agreement usually stipulates a period of time that the NCA will be in effect and a geographic area that it includes.

The purpose of an NCA is protecting the employer's business assets. At its simplest, an NCA might prevent a former employee from starting a business that would compete with the employer or accepting employment with a current competitor. That stipulation is designed to prevent a competitor from benefiting from information the former employee gained through his term with the company. Examples of such information include trade secrets, product designs and other intellectual property, as well as sensitive information including customer data, operational data and marketing plans.

Employees usually gain expertise the systems they work with over the term of their employment, and that expertise is not subject to restriction. A network administrator, for example, may leave a company with more skills than he or she had at the start of the job. An NCA cannot prevent the employee from using general skills gained while they were with the company.

A well-crafted NCA should adequately protect the company without unduly hampering the employee's future. Overly restrictive NCAs can effectively make it impossible for the signee to find a job in their chosen field that doesn't require them to relocate.

Commonly, an NCA is signed by an employee as part of a severance agreement, although some businesses require new hires to sign them. Non-compete agreements signed in one jurisdiction may or may not be binding in another, depending on local laws.

See also: non-disclosure agreement (NDA)

This was last updated in March 2017

Continue Reading About non-compete agreement (NCA)

Join the conversation

1 comment

Send me notifications when other members comment.

By submitting you agree to receive email from TechTarget and its partners. If you reside outside of the United States, you consent to having your personal data transferred to and processed in the United States. Privacy

Please create a username to comment.

Does your company require employees to sign non-compete agreements?
Cancel

-ADS BY GOOGLE

File Extensions and File Formats

Powered by:

SearchCompliance

SearchSecurity

  • copyright

    Copyright is a legal term describing ownership of control of the rights to the use and distribution of certain works of creative ...

  • keylogger (keystroke logger or system monitor)

    A keylogger, sometimes called a keystroke logger or system monitor, is a type of surveillance technology used to monitor and ...

  • password

    A password is an unspaced sequence of characters used to determine that a computer user requesting access to a computer system is...

SearchHealthIT

SearchDisasterRecovery

  • business continuity plan (BCP)

    A business continuity plan (BCP) is a document that consists of the critical information an organization needs to continue ...

  • call tree

    A call tree -- sometimes referred to as a phone tree -- is a telecommunications chain for notifying specific individuals of an ...

  • mass notification system (MNS)

    A mass notification system is a platform that sends one-way messages to inform employees and the public of an emergency.

SearchStorage

  • RAID (redundant array of independent disks)

    RAID (redundant array of independent disks) is a way of storing the same data in different places on multiple hard disks to ...

  • data migration

    Data migration is the process of transferring data between data storage systems, data formats or computer systems.

  • compact disc (CD)

    A compact disc is a portable storage medium that can be used for recording, storing and playing back audio, video and other data ...

SearchSolidStateStorage

  • NVMe (non-volatile memory express)

    NVMe (non-volatile memory express) is a host controller interface and storage protocol to enable a solid-state drive to use the ...

  • SSD RAID (solid-state drive RAID)

    SSD RAID (solid-state drive RAID) is a methodology commonly used to protect data by distributing redundant data blocks across ...

  • Tier 0

    Tier 0 (tier zero) is a level of data storage that is faster, and perhaps more expensive, than any other level in the storage ...

SearchCloudStorage

  • RESTful API

    A RESTful application program interface breaks down a transaction to create a series of small modules, each of which addresses an...

  • cloud storage infrastructure

    Cloud storage infrastructure is the hardware and software framework that supports the computing requirements of a private or ...

  • Zadara VPSA and ZIOS

    Zadara Storage provides block, file or object storage with varying levels of compute and capacity through its ZIOS and VPSA ...

Close