A non-compete agreement is an official document that ensures employees cannot enter into competition with their employer while they are employed or afterwards. It is a contract between the two parties, which means that employees cannot become a competitor or work for one for a defined amount of time.
Non-compete agreements can be used by an employer to prevent a previous employee from taking up a role with a competitor. They also often cannot start a business in the same field for the period of time stated. Contractors and consultants must often sign non-compete agreements so they cannot work for the competition after working for the business they have the contract with.