Non-competition agreements to limit competition between companies and employees
Posted: Tue Dec 17, 2024 5:36 am
Non-competition agreements are a tool of labour law that allows the competition of an employee to be limited during the term of an employment contract and for a certain period of time once it has expired. Their main purpose is to mitigate the risk of the transfer of information and resources from the company to the competition.
A few days ago, we saw the case of a worker who asked to leave his company voluntarily and, immediately afterwards, established himself as a self-employed person to provide services to three of the company's clients, with whom he collaborated during his time as an employee. The company filed a lawsuit, which was brunei email list dismissed because there was no agreement of concurrence between the parties, leaving the worker free once the contract was terminated.
Non-competition agreements are regulated in the Workers' Statute
Non-competition agreements are regulated in the Workers' Statute , in the second section, rights and obligations derived from the contract, article 21: Non-competition and permanence agreement in the company, which states the following:
1. A worker may not perform work for several employers when unfair competition is deemed or when full dedication is agreed upon through express financial compensation, under the terms agreed upon for this purpose.
2. The non-competition agreement for after the termination of the employment contract, which may not have a duration of more than two years for technicians and six months for other workers, will only be valid if the following requirements are met:
That the employer has an effective industrial or commercial interest in it, and
That the worker is paid adequate financial compensation.
3. In the event of financial compensation for full dedication, the worker may terminate the agreement and regain his freedom to work in another job, giving written notice to the employer thirty days in advance, in which case the financial compensation or other rights linked to full dedication will be lost.
4. When the employee has received professional training at the employer's expense in order to carry out specific projects or perform specific work, the employee may be agreed to remain in the company for a certain period of time. The agreement shall not exceed two years and shall always be formalised in writing. If the employee leaves the job before the deadline, the employer shall be entitled to compensation for damages.
Key elements in a non-competition agreement
First of all, the objective of a non-competition agreement is to limit the activity of the employee , in such a way that he is blocked from performing functions in other companies, or on his own, that may conflict with the interests of the business that has hired him. This blockage can be applied during the validity of the contract and from the termination of the employment relationship, for a maximum period of six months for non-technical employees and two years for technical employees. Anything that exceeds this duration will not be valid.
Non-competition agreements require a real industrial interest on the part of the employer to prevent the transfer of information to its competitors. It is of no use if this interest does not exist in reality, for example, if the employee does not have access to key information for the business. In addition to the real industrial interest of the employer, it is necessary that the employee be effectively compensated financially during the period in which his professional activity is to be limited.
A few days ago, we saw the case of a worker who asked to leave his company voluntarily and, immediately afterwards, established himself as a self-employed person to provide services to three of the company's clients, with whom he collaborated during his time as an employee. The company filed a lawsuit, which was brunei email list dismissed because there was no agreement of concurrence between the parties, leaving the worker free once the contract was terminated.
Non-competition agreements are regulated in the Workers' Statute
Non-competition agreements are regulated in the Workers' Statute , in the second section, rights and obligations derived from the contract, article 21: Non-competition and permanence agreement in the company, which states the following:
1. A worker may not perform work for several employers when unfair competition is deemed or when full dedication is agreed upon through express financial compensation, under the terms agreed upon for this purpose.
2. The non-competition agreement for after the termination of the employment contract, which may not have a duration of more than two years for technicians and six months for other workers, will only be valid if the following requirements are met:
That the employer has an effective industrial or commercial interest in it, and
That the worker is paid adequate financial compensation.
3. In the event of financial compensation for full dedication, the worker may terminate the agreement and regain his freedom to work in another job, giving written notice to the employer thirty days in advance, in which case the financial compensation or other rights linked to full dedication will be lost.
4. When the employee has received professional training at the employer's expense in order to carry out specific projects or perform specific work, the employee may be agreed to remain in the company for a certain period of time. The agreement shall not exceed two years and shall always be formalised in writing. If the employee leaves the job before the deadline, the employer shall be entitled to compensation for damages.
Key elements in a non-competition agreement
First of all, the objective of a non-competition agreement is to limit the activity of the employee , in such a way that he is blocked from performing functions in other companies, or on his own, that may conflict with the interests of the business that has hired him. This blockage can be applied during the validity of the contract and from the termination of the employment relationship, for a maximum period of six months for non-technical employees and two years for technical employees. Anything that exceeds this duration will not be valid.
Non-competition agreements require a real industrial interest on the part of the employer to prevent the transfer of information to its competitors. It is of no use if this interest does not exist in reality, for example, if the employee does not have access to key information for the business. In addition to the real industrial interest of the employer, it is necessary that the employee be effectively compensated financially during the period in which his professional activity is to be limited.