This represents a written agreement between the company and the employee, by which the latter undertakes not to undertake acts or acts of competition with the company, after the termination of the employment contract with the company. The non-competition clause is regulated in terms of labor relations by the Labor Code.
In general, the basic purpose of this regulation is a means of protection. The intention of the law is to protect the person who discloses sensitive information to another person with whom he is in a subordinate relationship and finally to ensure a relational balance, both in work or business relationships, as well as in relation to the employee who assume an additional obligation by accepting the responsibility of the job.
Establishing such a clause is important for companies when the employee occupies a key position in the company’s structure and, in light of this fact, has access to sensitive, confidential information of the company that would allow him to compete in the business of the former employer in the future, speculating on the information obtained as an employee. Such a clause is also important when the employer’s business is based on the practice of a trade or profession by the employee who, having access to the employer’s sensitive information (for example: database of clients, suppliers, pricing policy, strategies of sales, etc.), can develop a similar business having the advantage of the information obtained as an employee of the company.
When can the non-competition clause be concluded?
The non-competition clause can be negotiated and signed both at the conclusion of the employment contract and during its execution.
The non-competition clause requires the employee, after the termination of the contract, not to provide, in his own interest or that of a third party, an activity that is in competition with that provided at his employer, in exchange for a monthly non-competition allowance that the employer undertakes to pay throughout the non-competition period.
What does the non-compete clause contain?
The non-competition clause produces its effects only if the following are specifically provided for in the individual employment contract:
– the activities that are prohibited to the employee on the date of termination of the contract,
– the amount of the monthly non-compete allowance,
– the period for which the non-competition clause takes effect,
– third parties in whose favor the performance of the activity is prohibited,
– the geographical area where the employee can be in real competition with the employer.
The monthly non-competition allowance due to the employee is not of a salary nature, it is negotiated and is at least 50% of the average gross salary income of the employee from the last 6 months prior to the date of termination of the individual employment contract or, if the duration of the individual employment contract was less than 6 months, from the average gross monthly salary income due to him during the duration of the contract.
The non-compete allowance represents an expense incurred by the employer, it is deductible when calculating the taxable profit and is taxed to the beneficiary natural person, according to the law.
The non-competition clause can produce its effects for a maximum period of 2 years from the date of termination of the individual employment contract.