NON-COMPETE AGREEMENT

It is the clause for which the employer and the employee agree to limit the activity of the former employee once the employment relationship has ended.

It is therefore an agreement, which must result from a written act, different from the employment contract and independent of the obligation of loyalty (Art. 2105 c.c.). The competition pact does not only concern unfair competition, but any kind of competitive activity, even though it is legitimate.

By virtue of this agreement, in fact, it is limited to the possibility for a former employee or collaborator to compete with the company for a given period and within a given geographical area at the end of the employment relationship.

Reference Standard

The rules of reference for the non-compete pact are contained in articles 2125, 2596 and 1751 bis of the Italian Civil Code.

The jurisprudence states that, in order to be valid, the non-compete clause must be written in writing, it must not be longer than the one prescribed by Italian law (5 years for executives and 3 for all other workers), and the limitations of place, time and object must be expressed in the clause.

There should also be an increase in the employee’s remuneration during the working period in proportion to the duration of the non-compete obligation.

Agreement Infringement

The breach of the non-compete pact constitutes a breach of contract. The entrepreneur can then take legal action against the former employee to enforce the covenant (emergency procedure under article 700 CPC), as well as compensation for the economic damage and image caused by the breach.

To act judiciously it is necessary to demonstrate the existence of the non-competition clause under Article 21215 CC and to prove the breach by the employee. The responsibility lies with the entrepreneur who, for the purposes of the research and documentation of the test, may use authorized investigative agencies under Article 134.