In the workplace, a collaboration can often turn into competition. It is not uncommon to find ourselves in unpleasant situations where our ideas or knowledge are unfairly stolen to the detriment of our business. And this is where Italian law comes in handy with the non-compete agreement. It is a contractual clause which limits the ability of a company or an employee to carry out professional activities in competition with the company after the end of the employment relationship, in exchange for a certain remuneration. An obligation of loyalty governed by the Civil Code which is reciprocal for the entire period of collaboration and beyond.
If the parties involved are both companies, they mutually undertake not to engage in direct or indirect competitive activity with third parties and not to make job offers to employees of competitors operating in the same sector.
Current regulations
Its discipline lies in the Civil Code article 2125, 2596 and 1751-bisrespectively for employees, self-employed and commercial agents. It differs from the prohibition of competition in that the latter does not need any stipulation to be valid.
In fact, the clause can be inserted only if by mutual agreement between the parties, at the beginning of the employment relationship, during or upon termination of the contract. Although the freedom of the parties, they must respect some rules imposed by article 2596 of the CC: written form under penalty of nullity, duration maximum of 5 years for executives and 3 in other cases, limits of the prohibition of competition based on the type of activity carried out and the area of operation. Furthermore, if a longer duration is agreed, this is reduced by the indicated amount. Otherwise the labor judge can declare its ineffectiveness if the conditions governed by the code are not respected.
As regards the corresponding, the Civil Code does not specify the quantity but the worker can agree on a monthly payment (subject to pension contributions) or at the end of the contract (subject to the TFR tax regime). According to the Code, however, the remuneration must be proportional to the duration, the territorial extension and the object of non-competition.
Validity limits
In order not to excessively compromise the employee's work activity upon termination of the relationship, there are some limits to the validity of the non-competition agreement. In this case the agreement can be declared null and void.
In addition to the cases indicated above (form, object, duration, territory), the non-competition agreement is considered void if it compromises the income potential of companies or imposes limits to restrict professional capacity. If nullity is declared, the employer can ask the former employee to return the sums previously paid. Similarly, if the worker demonstrates that he has refused job offers due to the non-competition agreement declared null and void, then the non-return of such sums could be assessed.
What happens if one of the parties violates the non-compete agreement?
In the case of the worker we speak of unfair competition, while for the employer of parasitic competition. In these cases, the employer and employee can request the application of the penalty provided for in the employment contract and compensation for damages. Furthermore, in the event of unfair competition, the employer may initiate an emergency procedure to obtain a provision from the Judge which immediately imposes the cessation of the competitive activity.
This is a complex matter. This is why many choose to rely on a private investigation agency specialized in the employment sector. The investigators will collect the evidence necessary to confirm the possible violation of the agreement by one of the parties which can be used in the case of a legal process.
