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The ban on competitive activities during employment is a legal obligation that applies to all employees without the need for a separate agreement. It is, therefore, distinct from a non-compete clause.
The ban on competitive activities during the employment relationship means that an employee may not perform work for another employer or engage in activities that would clearly harm their employer as an act of unfair competition. The ban covers both work performed under the employment relationship and the employee’s own business activities.
The ban on competitive activities also covers preparations for such activities. An employee is permitted to enter into a new employment contract, but should refrain from other preparatory actions.
A violation of the non-compete clause may result in liability for damages and termination of employment.
If the employer is aware of the competitive activity at the time the employment contract is signed and does not require that it be discontinued, the employer is deemed to have granted permission for the competitive activity. It is recommended that the employee obtain written confirmation of this.
When does the restriction on competitive activity end?
The non-compete clause ends when the employment relationship ends. However, it remains in effect even during the notice period, even if the employee is no longer required to work.
Once the employment relationship has ended, the employee is, in principle, free to engage in competitive activities – such as taking a position with a competing employer – unless the employment contract specifically includes a non-compete agreement covering the period after the employment relationship ends.
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