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Medlegal | Get Started

Non Compete Agreement

A non-compete agreement is executed between an employer and an employee. In this agreement, the employee agrees that he will not enter into competition with the employer after or during his employment.

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A non-compete agreement is executed between an employer and an employee. In this agreement, the employee agrees that he will not enter into competition with the employer after or during his employment. This contract prevents employees from entering into markets or competing with the employer.


A non-compete agreement is in effect for a certain period after the term of employment. It is essential to plan the dates well in advance. Employers can set a non-compete agreement within a realistic timeline and cannot prevent former employees from achieving success in that particular field.


There are challenges whether non-compete agreements are legally binding. The legal validity of non-compete agreement varies from case to case and depends on how restrictive the terms and conditions are in the agreement.


Non-compete agreements must be fair and equitable for all parties. They require the following information to be considered:

  • The effective date of the commencement of the agreement
  • The purpose of executing the agreement
  • The date on which the employee will be barred from working in the market as a competitor
  • Information regarding the compensation imposed on the party performing as non-competence of the agreement
  • It is also known as a non-compete clause and non-compete for the covenant


The Employers benefit from non-compete agreements as they keep away a former employee from sharing knowledge, secrets of the company, strategy, client lists and other confidential information to share with the competitor of their company.  This strategy benefits the employer to protect their business.


Employees get benefit from non-compete agreements as they receive some value in return for signing the agreement. Also the promotion or raise in return for the signature qualifies something as value.

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