Non-Compete Clauses In Employment Contracts: Validity Requirements And Limits

1. Introduction

An employment relationship is, by its nature, a continuous legal relationship based on an element of trust between the parties. During the term of the employment contract, the employee is under an obligation to protect the employer’s interests, act in accordance with the duty of loyalty, and refrain from competing with the employer. However, upon termination of the employment contract, the employee’s freedom to work and right to freely determine his or her economic future come into play. At this point, a delicate balance must be established between the employer’s interest in protecting its trade secrets, customer base, and know-how, and the employee’s constitutional freedom to work.