Post-contractual non-compete

Post-contractual non-compete obligation must not cover all activities for a competitor

By Till Basfeld / 20 March 2019 11 June 2019 / Managing Director, Post-contractual non-compete

In an indicative ruling dated August 02, 2018, the Higher Regional Court Munich (docket number 7 U 2107/18) has found that a post-contractual restraint which prohibited a managing director from working for a competitor in any way was invalid due to the lack of legitimate interests of the company. The managing director was therefore able …

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Act of defiance or effective waiver of rights?

By Till Basfeld / 22 March 2018 11 June 2019 / Post-contractual non-compete

Due to the compulsory compensation payments, post-contractual non-competes are only common in Germany with regard to key employees with significant knowledge of the employer’s business or close client relationships. However, they are quite often the subject matter of legal disputes. Just recently the Federal Labour Court (Bundesarbeitsgericht, BAG) has ruled on the question of the …

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Penalty clause unenforceable where non-compete obligation is invalid

By Saskia MacLaughlin / 14 August 2017 11 June 2019 / Employment contract, Post-contractual non-compete

If a post-contractual non-compete obligation is invalid and therefore non-binding, a penalty clause intended to protect this clause is unenforceable (judgment of the Solingen labour court dated 20 June 2017, docket number 3 Ca 153/17). The employee worked for a travel agent and had mainly sold cruises. The employee’s contract included a post-contractual non-compete obligation …

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Non-compete clauses – No Compensation for Abstention – Severability Clause

By Volker von Alvensleben / 4 April 2017 11 June 2019 / Employment contract, Post-contractual non-compete

Non-compete provisions valid for the period after an employment relationship has ended are invalid unless the agreement provides for a compensation payment of 50% of the employee’s former salary during the entire duration of the post-contractual non-compete obligation. This decision by the German Federal Employment Court (docket no. 10 AZR 448/15, dated March 22, 2017) …

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Employment Germany

Post-contractual non-compete