Post-contractual non-competition clause

The most important facts in brief:

• Post-contractual non-compete clauses ensure that employees remain loyal to their former employer after the end of the contract. no competition make.
• If the non-competition clause is effective, the employer must provide the employee with a Pay compensation (so-called waiting allowance, at least 50 % of the last benefits received).
• The agreement of a post-contractual non-competition clause requires a written agreement required.

What is a post-contractual non-compete clause?

If it is agreed that employees will be transferred to the Do not compete with former employer This is referred to as a post-contractual non-compete clause. The background to a post-contractual non-competition clause is that employees gain connections to customers and insights into the company in the course of their work. The post-contractual non-competition clause is intended to ensure that employees do not use the knowledge and contacts they have acquired to the detriment of the employer.

As long as the employment contract is valid, a non-competition clause arises from the employment contract without the need for an express provision. If the non-competition clause is also after the end of the employment contract still apply, the non-compete clause must agreed in writing become.

When is a post-contractual non-compete clause effective?

A post-contractual non-compete clause severely restricts employees. It prohibits them from working in certain areas. It thus deprives employees of the freedom to choose their profession. For this reason, a post-contractual non-competition clause can only be enforced if the following conditions are met. These result from §§ 74 ff. HGB in conjunction with § 110 GewO:

• Written agreement & handoverA post-contractual non-competition clause must be agreed in writing. Written means that there must be a contract signed by hand. A signed version must also be given to the employee. This distinguishes the post-contractual non-competition clause from the non-competition clause during employment, which exists without an express agreement.
  NoteA clause in the employment contract according to which the employee confirms that he/she has received an original copy is invalid under Section 309 No. 12 b) BGB. Accordingly, it is important that the employer obtains separate confirmation of receipt.
• DurationA non-competition clause may only be concluded for as long as is necessary. The law sets an upper limit of two years. However, this upper limit does not mean that it is always permissible to conclude a non-competition clause for two years. Even within the time frame of two years, the non-competition clause is only enforceable to the extent that it is necessary.
  Note: At the same time, however, a short non-competition clause is not automatically permissible. If the non-competition clause is too short, there is a risk that the non-competition clause will be deemed unnecessary by the courts because it is only suitable for making it more difficult for the employee to switch to another employer.
• Legitimate interestThe employer must have a legitimate business interest in the post-contractual non-competition clause. Accordingly, it is not permissible to agree a post-contractual non-competition clause solely for repressive reasons. The post-contractual non-competition clause must also be covered by a legitimate business interest of the employer in terms of content and territory.
• No undue impairmentA non-competition clause must not unreasonably impair the employee's professional advancement. A non-competition clause should be limited in terms of content and location. If a post-contractual non-competition clause goes further than necessary, it is limited to the necessary part. Accordingly, a non-competition clause that is too extensive does not render it invalid as a whole.
• CompensationIf the employee is not allowed to work due to the post-contractual non-competition clause, he must still be financially secure. The disadvantage of only being able to make limited professional use of the knowledge acquired in his last employment must also be compensated. For this reason, a non-competition clause is only permissible if the former employee receives compensation for the period of the non-competition clause amounting to at least 50 % of the last benefits received. When calculating this so-called Compensation for waiting time variable salary components (bonus, commission, etc.) are also taken into account, whereby the average of the last three years is decisive.

If the post-contractual non-competition clause is effective, it can be replaced by an agreement canceled become.

What are the consequences of an ineffective post-contractual non-compete clause?

If a post-contractual non-competition clause does not meet the above requirements, the consequences depend depends on which requirements are violated has been made. The post-contractual non-compete clause can be null and void, meaning that neither the employer nor the employee can invoke it. However, it can also only be non-binding - this means that the employee has the right to choose whether to comply with the post-contractual non-competition clause and receive compensation or not to comply with the post-contractual non-competition clause, in which case the right to compensation also lapses.

In the following cases, the post-contractual non-competition clause void:

• No written formIf the non-competition clause has not been agreed in writing.
• No compensationIf the post-contractual non-competition clause does not provide for any compensation, it is null and void.

In the following cases, the post-contractual non-competition clause non-binding:

• No handoverIf the employer does not hand over a signed copy of the agreement.
• No legitimate interestUnless the employer has a legitimate interest, the post-contractual non-competition clause is non-binding. Otherwise, the employee must comply with the post-contractual non-competition clause.
• Too farIf the post-contractual non-competition clause was agreed for more than two years or is too comprehensive in terms of content, it is non-binding. However, the non-competition clause is only invalid if it goes too far. Otherwise, the employee is bound by it.
• Compensation too lowIf the post-contractual non-competition clause provides for compensation that is too low, it is non-binding. The employee has the right to choose whether to comply with the post-contractual non-competition clause (in which case he will receive the promised compensation, which is too low) or not.

Which activities are covered by the post-contractual non-competition clause?

The post-contractual non-competition clause can both exclude work for competitor companies and prohibit self-employed activities. However, employees cannot be prohibited from providing pure support services for competitors. If an employee helps a friend who works for a competitor with her tax return, this does not constitute impermissible competitive activity.

What are the special features of compensation for maternity leave?

The Compensation of the employeewhich he receives during the period in which he is not allowed to work is also known as waiting time compensation. With regard to compensation, there are some special features that employees and employers should bear in mind:

• At least 50 %Compensation must amount to at least 50 % of the last total salary. Benefits in kind (e.g. company car) and variable salary components (e.g. commission, annual bonus or Christmas bonus) are also taken into account. With regard to variable salary components, the average value of the last three years is generally taken into account.
• CreditingIncome earned during the period of the non-competition clause is offset against the compensation if the income and the compensation together exceed 110 % of the last salary (125 % in the event of a change of residence).
• TaxesThe compensation payment must be taxed.
• Social insurancesSocial security contributions are only payable on the compensation payment if the compensation payment is made during employment. [Is this the case?]
• Severance paymentIf the employment relationship is terminated by means of a termination agreement, the severance payment may not be offset against the waiting allowance. There is therefore an entitlement to both the compensation and the severance pay.

Example of offsetting: The employee's last salary was € 10,000 per month. If she is entitled to a waiting allowance of € 6,000 per month and at the same time receives further income of € 7,000 from her next employer, she would earn a total of € 13,000 per month. However, if 110 % of her previous salary is exceeded, the waiting allowance is reduced: 110 % of € 10,000 per month is € 11,000. Accordingly, income in excess of € 11,000 is offset against the compensation. The compensation is therefore reduced by € 2,000 to € 4,000, so that the employee receives a total of € 11,000 (€ 7,000 other income and € 4,000 compensation).

What happens in the event of a breach of the non-competition clause?

If an employee breaches a post-contractual non-competition clause, the following claims may be considered:

• Claim for injunctive reliefAs an employer, you have a right to demand that the activity in breach of contract be discontinued.
• Claim for damagesIf you as an employer have suffered demonstrable damage, you can demand compensation.
• Contractual penaltyIf a contractual penalty has been agreed, you can demand it.

Particularly in the case of a claim for injunctive relief, interim relief may be considered in order to ensure that the breach of contract is refrained from in a timely manner.