A non-compete agreement, also known as a restrictive covenant, is a legal contract between an employer and an employee or between two companies that restricts the employee or company from engaging in competitive activities with the employer or the other company for a certain period of time and within a specific geographic region after termination of employment or business relationship.

The purpose of a non-compete agreement is to protect the employer's or company's trade secrets, confidential information, and customer relationships, which are critical to the success of the business. By restricting the employee or company from competing, the employer or company can prevent the employee or company from using such information or relationships to gain a competitive advantage or to harm the business.

Non-compete agreements typically specify the duration and geographic scope of the restriction, the types of activities that are restricted, and the compensation that the employee or company receives in exchange for signing the agreement. In some cases, non-compete agreements may be challenged or invalidated if they are considered too broad, unreasonable, or if they impose undue hardship on the employee or company.

Non-compete agreements are commonly used in industries where employees have access to sensitive information or trade secrets, such as technology, healthcare, finance, and consulting.