1. Definition of Restrictive Covenants
Provisions on restrictive covenants in Colombian labor law are scarce. The legislation only provides rules for non-compete clauses. Restrictive covenants are therefore allowed, under some general limitations. Any clause that may limit the employee’s right to work (which includes his right to access new employment) is considered ineffective and cannot be enforced by a judge, even if the employee consented to the use of such a clause.
2. Types of Restrictive Covenants
a. Non-Compete Clauses
The Colombian Labor Code expressly allows for the possibility of the employer to agree with his personnel, on a general prohibition to provide services in determined activities or the employer´s competitors. This class of non-compete clauses are only allowed by law while the employment contract is ongoing. Non-compete clauses that are meant to apply after the employment contract has ended, are invalid.
b. Non-solicitation of customers
Such a provision does not exist in Colombian labor law. However, restrictive covenants on non-solicitation of customers are often used for high-executive employees. While a clause of this nature may restrict the former employee’s right to work, a limitation on the former employee’s possibilities to perform actions that might harm the Company through direct solicitation of customers, are proportional and reasonable to protect the Company interests.
c. Non-solicitation of employees
These types of restrictive covenants are not normally used for employees in their employment contracts, but rather between Companies in their commercial relationships to avoid possible acts of unfair competition.
3. Enforcement of Restrictive Covenants—process and remedies
Restrictive covenants may be included in the employment contract (normally used for non-compete clauses) or in separate documents during the employment relationship or after it. A violation of a restrictive covenant during the employment contract can be subject to disciplinary measures from the employer and eventually the termination of the contract with a fair cause. The violation of a restrictive covenant, which intends to apply after the employment relationship ends, can be enforceable through a legal claim against the former employee.
4. Use and Limitations of Garden Leave
Garden leave practice is allowed in Colombian Labor law (Article 140 of Colombian Labor Code), but limitations apply whenever the employer’s request that the employee refrain from providing his services may lead to a discriminatory measure or possible conduct of harassment against the employee to make him resign his contract.