Definition and Types of Restrictive Covenants
Although Mexican legislation does not provide for a specific concept of restrictive covenants, they may be defined as any contract, covenant, or agreement having as scope the restriction, loss or irrevocable sacrifice of the personal freedom. Mexican law does not expressly prohibit clauses or covenants of this nature during the employment relationship. Execution of restrictive covenants has become more common in Mexico as a means to protect the employer’s confidential information and trade secrets, as well as to ensure the companies’ right to loyal competition.
The following restrictive covenants are recognized and may be enforceable under the law:
- Non-compete clauses;
- Non-solicitation of customers;
- Non-solicitation of employees.
Enforcement of Restrictive Covenants—process and remedies
In principle, Restrictive Covenants are only “enforceable” during the employment relationship as a cause for termination and without liability on the employer. From a labour standpoint, post-employment Restrictive Covenants are null and void under Mexican legislation and, therefore, unenforceable; the only possibility for “enforcement” is before the Civil Courts.
Use and Limitations of Garden Leave
Mexican legislation does not provide for garden leave.