Non-compete clauses: All the rules
There are many different types of non-compete clauses. They are subject to very different rules. In order to know his rights, the litigant must distinguish the type of clause he has signed.
In order to help you see things more clearly, we propose below a series of practical sheets which explain in clear terms the rules applicable to the various non-compete clauses.
The following lines also present the different possibilities for litigants to use or dispose of non-compete clauses.
If you have any questions, please do not hesitate to contact us!
Non-compete clause: get out of the uncertainty!
A non-compete clause is a clause in a contract between two people under which one person refrains from competing with the other – either as an employee or in a self-employed capacity.
To be valid, the clause must meet a number of strict conditions.
Litigation related to non-compete clauses is voluminous. This is undoubtedly due to the fact that the sudden termination of a collaboration in order to launch a competing activity is often perceived as a betrayal by the person affected. A certain amount of personal resentment – not always illegitimate – often finds its way into the legal actions that follow.
However, the rules are very different depending on the context in which they are applied. The best practitioners sometimes confuse the issue It is important to identify the type of clause that concerns you.
For your guidance, we distinguish in the following two situations, depending on whether :
- the contract is between two companies;
- the contract between a worker and his employer.
For more information on the legality of your contract, select the sheet that corresponds to your situation below.
1/ The contract binds two companies (including non-compete clauses concluded with an independent):
2/ The contract between a (former) worker and his (former) employer:
In the worker/employer relationship, a distinction must be made between cases depending on the period in which the competing activities take place.
- During the employment relationship, by its very nature, a “tacit” non-compete clause is imposed on the worker (risk for workers who start a self-employed activity in a complementary capacity);
- After the employment contract, only employees who have expressly signed a non-compete clause are subject to reservations. Again, a distinction is made between two hypotheses:
- The post-contractual non-compete clause may have been provided for in the employment contract. There are several types:
- The post-contractual non-compete clause may also have been concluded after the end of the employment contract. Their legality is questionable.
Some procedural rules on non-compete clauses
It is not just a matter of being within your rights. It is still necessary to demonstrate this! The litigant must therefore make sure to respect elementary rules of procedure (or to seek effective advice). Below we set out some important procedural rules for the implementation of non-compete clauses:
Don’t confuse them!
Finally, the contractual non-compete obligation should not be confused with two similar situations. Let us make two useful clarifications here:
- Unfair competition is always prohibited; it makes it possible to punish the misappropriation of personnel even in the absence of a contractual non-compete obligation;
- Even if they are often combined and/or confused, non-compete clauses must be distinguished from exclusivity clauses. Whereas the non-compete clause aims at prohibiting the debtor from competing, the exclusivity clause aims at obtaining from the debtor that he devote all his efforts to his co-contractor.
The various links in this fact sheet provide more information on the situation you are facing.