A non compete clause prevents an individual from working somewhere else for a period of time after they leave their employment. They are a type of restrictive covenant.
Pure non-compete clauses have been controversial for several years. They can stop a person from working and earning a living. Depending on the industry, they could also prevent them from using skills which need to be regularly exercised to stay up to date and relevant.
Non-compete clauses are often included in a contract of employment along with the other restrictions as a standard clause. However, commercially employers often accept that if pushed they may not be enforceable. They are often included as a deterrent with employers not actually intending on enforcing them if breached, but instead hoping employees will abide by them due to the fear of any repercussions if they did breach them.
Although a specific clause all on its own, often the term “non-compete clause” is also used to refer collectively to all types of restrictive covenants. For example, non-solicit, non-deal, non-poach and non-compete clauses.