What is the primary purpose of a "non-compete agreement"?

The primary purpose of a non-compete agreement is to prevent employees from engaging in competing business activities after leaving their employment. This type of agreement is designed to protect an employer's legitimate business interests, including proprietary information, trade secrets, and customer relationships. By limiting the ability of employees to work for competitors or start competing businesses within a specified geographical area and time frame, the agreement aims to reduce the potential for damage to the employer's business that could arise from an employee taking their skills and insider knowledge to a rival company.

Non-compete agreements are often used in industries where sensitive information or client relationships are key assets. They help maintain a competitive edge and encourage companies to invest in training and developing their employees, knowing those employees will have restrictions on taking valuable knowledge to competitors.

The other options suggest alternative purposes that are not aligned with the fundamental objective of non-compete agreements. For example, allowing the free sharing of trade secrets would undermine the very reason these agreements are in place. Encouraging longer working hours focuses on labor hours rather than competition, and providing employees with ownership stakes relates to employee benefits rather than competition dynamics, which is not the focus of a non-compete agreement.