Common use of Competition provisions Clause in Contracts

Competition provisions. Provisions in employment contracts that forbid employees to enter into an employment contract with the competitors of the employer are non-binding if such an engagement is wider in scope than would be necessary in order to prevent competition or to limit in an unfair manner the employee’s freedom to employment. To determine whether this is the case, each case must be evaluated on a case-by-case basis, taking into consideration all circumstances. Competition provisions, may not be worded too generally. When assessing how far reaching competition provisions in the employment contract may be, particular as regards their scope of application and the time limits involved, the following factors must be considered: a. The type of work performed by the employee involved, e.g. is the employee a key employee, in direct contact with the customer or is there significant confidentiality attached to the job? In addition, what knowledge or information the employee might possess with regard to the activities of the company or its customers. b. How quickly the employee’s knowledge becomes outdated and whether a normal balance is kept among the employees. c. The type of operations involved and the identity of the competitors in the market where the company operates and which the employee’s know-how covers. d. That an employee’s freedom of employment is not restricted in an unfair manner. e. That the non-competition clause is clearly defined and concise with regard to the purpose of protecting certain competition interests. f. The remuneration of the employee will also have an effect, i.e. for instance, what his wages are. The competition provisions of employment contracts do not apply if the employee is dismissed from his position without sufficient cause.

Competition provisions. Provisions in employment contracts that forbid employees to enter into an employment contract with the competitors of the employer are non-binding if such an engagement is wider in scope than would be necessary in order to prevent competition or to unfairly limit in an unfair manner the employee’s freedom to employment. To determine whether this is the case, each case must be evaluated on a case-by-case basis, taking into consideration all circumstances. Competition provisions, therefore, may not be worded too generally. When assessing how far reaching making an assessment of the permissible scope of a non-competition provisions clause in the employment a contract may beof employment, particular particularly as regards their scope of application and the time limits involvedlimits, the following factors must be considered: a. The type of work performed by the employee involved, e.g. is the employee a key employee, in direct contact with the customer or is there significant confidentiality attached to the job? has a high level of confidentiality. In addition, what knowledge or information the employee might possess with regard to the activities of the company or its customers. b. How quickly the employee’s knowledge becomes outdated and whether a normal balance is kept among the employees. c. The type of operations involved and the identity of the competitors in the market where the company operates and which the employee’s know-how covers. d. That an the employee’s freedom of employment is not restricted in an unfair mannerunfairly. e. That the The non-competition clause is clearly must be defined and concise with regard to the purpose of protecting certain competition interests. f. The remuneration perquisites of the employee will also have an effect, i.e. for instance, effect on what his wages are. The competition provisions of employment contracts do not apply if the employee is dismissed from his position without sufficient cause.