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

2 comments

Send me notifications when other members comment.

Please create a username to comment.

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

-ADS BY GOOGLE

File Extensions and File Formats

SearchCompliance

  • regulatory compliance

    Regulatory compliance is an organization's adherence to laws, regulations, guidelines and specifications relevant to its business...

  • privacy compliance

    Privacy compliance is a company's accordance with established personal information protection guidelines, specifications or ...

  • data governance policy

    A data governance policy is a documented set of guidelines for ensuring that an organization's data and information assets are ...

SearchSecurity

  • asymmetric cryptography (public key cryptography)

    Asymmetric cryptography, also known as public-key cryptography, is a process that uses a pair of related keys -- one public key ...

  • Evil Corp

    Evil Corp is an international cybercrime network that uses malicious software to steal money from its victims' bank accounts.

  • Plundervolt

    Plundervolt is a method of hacking that involves depriving an Intel chip of power so that processing errors occur.

SearchHealthIT

  • telemedicine (telehealth)

    Telemedicine is the remote delivery of healthcare services, such as health assessments or consultations, over the ...

  • Project Nightingale

    Project Nightingale is a controversial partnership between Google and Ascension, the second largest health system in the United ...

  • medical practice management (MPM) software

    Medical practice management (MPM) software is a collection of computerized services used by healthcare professionals and ...

SearchDisasterRecovery

SearchStorage

  • M.2 SSD

    An M.2 SSD is a solid-state drive (SSD) that conforms to a computer industry specification written for internally mounted storage...

  • 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 or ...

  • cache memory

    Cache memory, also called CPU memory, is high-speed static random access memory (SRAM) that a computer microprocessor can access ...

Close