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:

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: