Non-competition clause vs. Confidentiality clause in employment relationships⚖️🤝

1. Non-compete clause

This is an undertaking by the former employee that, after termination of the individual employment agreement, he or she will not, for his or her own benefit or that of a third party, perform work in competition with work performed for his or her employer, in return for a monthly non-compete indemnity which the employer undertakes to pay for the entire non-compete period.

• It must be included in the individual employment agreement or in an additional instrument signed by both parties;
• It shall take effect only after termination of employment;
• To be valid, it must include:
  • activities forbidden to the former employee after the termination of the contract;
  • period (maximum 2 years);
  • territory in favour of which the activity is forbidden;
  • geographical area in which the employee is in competition with the employer
  • monthly non-compete indemnity - to be negotiated and at least 50% of the average of the employee's gross salary income over the last 6 months.
• In the event of a breach, the employer may claim reimbursement of the compensation paid and damages for the loss suffered.

2. Confidentiality clause

An undertaking by one of the parties not to disclose data or information which has come to their knowledge during the performance of the individual employment agreement.

• It must be inserted in the individual employment agreement or in an addendum;
• Aims to protect the employer's sensitive information, such as: technical data, business strategies, databases or other non-public elements whose disclosure could damage the employer;
• It takes effect both for the duration of the contract and for a fixed period after termination, depending on the contractual provisions;
• No financial compensation is required for this obligation;
• Must clearly state the duration and subject matter of the clause;
• In case of breach, the employer may incur civil liability, and in certain serious cases criminal liability.

Key differences

1. Nature of the obligation

• The non-competition clause implies a prohibition to carry out competing professional activities after termination of the employment agreement;
• The confidentiality clause implies a prohibition to disclose sensitive information.

2. Moment to produce the effects

• The non-competition clause only takes effect after termination of employment;
• The confidentiality clause is applicable both during and after termination of the contract, depending on the contractual provisions.

3. Payment of an indemnity

• The non-compete clause requires the payment of a monthly indemnity;
• The confidentiality clause does not necessarily require the payment of financial compensation.

We invite you to contact us for specialized drafting and review of non-compete and confidentiality clauses tailored to your specific needs. We provide you with legal assistance, guiding you step by step through the process of drafting or reviewing your individual employment agreements or addendums to them, so that you protect your rights and comply with the law.