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 unfairly limit 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 making an assessment of the permissible scope of a non-competition clause in a contract of employment, particularly as regards scope and time limits, the following factors must be considered:

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 unfairly 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, therefore, may not be worded too generally. When making an assessment of assessing how far reaching competition provisions in the permissible employment contract may be, particular as regards their scope of a non-competition clause in a contract of employment, particularly as regards scope application and the time limitslimits involved, the following factors must be considered: