Restrictive Covenants in Czech Republic

1. Definition of Restrictive Covenants

All covenants that refrain the employee from performance of activities that interfere with the justified interests of the employer.

2. Types of Restrictive Covenants

a. Non-Compete Clauses

Only this restrictive covenant is explicitly regulated by the Labour Code (Sec. 310). If a non-competition clause has been made whereby an employee agrees that, for a certain period after termination of the employment, not exceeding 1 year, the employee will refrain from the performance of a gainful activity that would be identical or compete with the employer’s objects of activities.

b. Non-solicitation of customers

The Labour Code contains only a general rule that in addition to employment, employees may perform gainful activities that are identical to the objective of the employer by whom they are employed only with the employer’s prior written consent. There are restrictive covenants explicitly regulated by the Labour Code with regard to the non-solicitation of customers after the termination of employment.

c. Non-solicitation of employees

This restrictive covenant is not explicitly regulated by the Labour Code and is difficult to enforce within the Czech legal environment. There applies the same expository “reserved access” as explained in the above paragraph.

For more information, please contact L&E Global.
This information was contributed by Dominik Bruha Advokat.
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