Non-Compete Clauses – Staying Within The Boundaries

Introduction

Non-compete clauses can provide important protection for purchasers who have a legitimate interest in maintaining the value of the business they are acquiring. However, careful consideration must be given to the drafting of non-compete clauses in order to avoid allegations of anti-competitive conduct – which is a criminal offence in Ireland – and scrutiny from competition regulators such as the Competition and Consumer Protection Commission (CCPC) and the European Commission.

In general, a non-compete will not raise concerns if it:

• is limited to a duration of two years (where goodwill is being transferred);
• is limited to a duration of three years (where know-how also transfers);