The two main protections the agreement provides is non-competition and non-solicitation.
Non-competition means that the business is protected from competition from other parties to the agreement, such as employees, contractors or other businesses. Effectively, these parties are prevented from engaging in competitive activities in places where the business operates or sells its products.
Non-solicitation means that the business is protected from other parties adversely interfering with any of the business' business relationships; for instance, by trying to lure away the business' own employees, customers or vendors.
Non-compete agreements also protect proprietary information, such as operational processes, patent and trademark information, manufacturing information and more. The agreement can also protect confidential information and trade secrets, if required, such as customer information, business know-how and business plans.
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