Definition - What does Non-Compete Agreement mean?
A non-compete agreement is an agreement between two parties, in which one party agrees not to be in competition against the other for a particular thing and for a certain period of time. For example, a salesperson may sign a non-compete agreement that restricts them from using or working on a contract gained by another salesperson or from working for a particular type of business, etc.
Non-compete agreements are especially common in employment contracts.
Justipedia explains Non-Compete Agreement
Non-compete agreements are also very common in a sale of business scenario. In this case, the seller might agree to the fact that they will not be competing directly against the party acquiring the business for a fixed period of time.
Different states treat non-compete agreements differently.