Competition prohibition and competition clause

The ban on performing a competitive activity is regulated by the Employment Relationships Act and is one of the obligations of the worker to the employer, which does not need to be regulated by a contract of employment.

The competitive ban relates to those transactions that fall within the scope of the employer's activities and his interests could be affected if the employee performs this activities. The prior written consent of the employer for the performance of activities or the conclusion of transactions, which could mean competition for the employer, is necessary. In the event of a breach of the competitive ban over the duration of the employment relationship, the employer may claim damages from the worker, but the employer must prove the existence of the damage within three months of the day he learned about the work or the conclusion of the transaction, or within three years of the completion of the work or business.

The competition clause is also regulated by the Employment Relationships Act and it represents a written agreement which prohibits the pursuit of a competitive activities after the termination of the contract of employment (employment relationship). With the clause the worker commits himself that after a termination of the employment relationship he will not perform any work or conclude transactions in which he may use the technical, production or business knowledge and business relationships he has acquired while working with the employer (but no longer than for a period of two years). For the duration of the competitive clause the employer is also obliged to pay the former employee a monetary compensation, because the worker will not be able to fully use all his knowledge, business relationships and abilities in order to find new job. Here we are talking about technical, production and business knowledge, which the worker could not been able to acquire otherwise on the market, and not the general knowledge that the worker acquires during the employment relationship with the employer as a result of his work experience.

We also offer legal support to legal entities in the area of labor law, which helps them to prepare quality employment contracts and related acts that affect employees' limitations.