1. Definition of Restrictive Covenants
An employee shall not engage in any activity in competition with the employer, and shall not perform work under an employment relationship or on another basis to the benefit of any entity involved in such an activity (non-competition clause) unless such activity stated permissible in a separate agreement. This includes non-solicitation of customers. This rule applies accordingly to any post-employment non-competition agreement concluded by an employer and an employee who has access to particularly sensitive information whose disclosure could cause damage to the employer. The agreement should define the extent of the non-competition clause and the amount of compensation due to the employee from the employer.
Non-solicitation of employee clauses are invalid based on case law as they violate the right to free choice of employment. No person may be prohibited from exercising his/her profession.
2. Enforcement of Restrictive Covenants—process and remedies
If an employer suffers damage due to the employee’s breach of the non-competition provisions of the employment contract, or post-employment non-competition agreement, the employer may claim compensation. The non-competition agreement becomes invalid before the expiry of the term of the agreement referred to therein, if the grounds justifying the non-competition clause have ceased to exist, or if the employer is in breach of the obligation to pay compensation.
3. Use and Limitations of Garden Leave
The employer may exempt the employee from the obligation to perform work until the lapse of the notice period upon termination of the employment contract. During the period of exemption, the employee shall retain the right to remuneration.