In connection with an employee taking on a position as regional manager at a company in early 2015, the employee signed an employment agreement with a non-competition clause. The clause was an undertaking not to start or run business in competition with the employer, during the employment and for 24 months after the termination of employment. The employment was terminated in December 2015 and one month later, the former manager started a business that was competing with his former employer. The employer brought an action before the court claiming that the former manager and his company should be prohibited to conduct business, since the manager was in breach of his non-competition clause.
The Labour Court initially stated that the term of the non-competition clause was long, but the term in itself did not make the clause unreasonable. The clause did not prohibit the manager to take up employment in a competing business, but the Court found that the clause imposed a restriction of the manager’s possibilities to continue working with professional activities given the manager’s old age and experience. The manager was not paid any compensation for the restriction during the term of the non-competition clause. Thus, based on an overall assessment, the Court found that the non-competition clause was unreasonable and therefore should be declared invalid. The employer’s action was dismissed.