Definition and Types of Restrictive Covenants
There is no legal definition given for restrictive covenants in Romanian legislation. However, some legal provisions allow the inclusion of specific clauses in the employment agreements that can offer a guarantee of good will between the parties. Also, some legal provisions will impose sanctions directly, without the existence of any contractual clauses, for the inappropriate conduct of the employee, with regards to his current or former employer.
The following restrictive covenants are recognised 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
The employer can choose to enforce or not the non-compete clause in the employment agreement, when the agreement is terminated. As a rule, it is advisable to inform the former employee that the clause will not be enforced, in order for him to know that his conduct will not be restricted in any way. If he is not informed and the indemnity is not paid he can sue the former employer for the payment of the indemnity. However, he has to prove that he refrained from all the prohibited activities as stated in the clause. In case of breach of the above covenants, or any other similar clauses included in the employment agreement, the party who wants to enforce the clause has to address the court.
Use and Limitations of Garden Leave
Garden leave is not regulated under Romanian law. If the employment is terminated and the employer does not require the presence of the employee during the notice period, he can ask the employee to not perform work during the notice period. In case of resignation, the employer can waive his right to benefit from the notice period, meaning that he can agree for the employee to stop working immediately (and not pay the employee anymore). However, in case of dismissal the employer has to be careful in forcing the employee not to work during the notice period since the employer still preserves his constitutional right to work. Some collective employment agreements have provisions that allow the employee that was dismissed to perform work only for half of the normal working hours during the notice period in order for the employee to be able to actively seek employment (in this case it is up to the employee if he wants to benefit from this contractual clause).