The non-compete clause is an optional clause that the employer can include in an employment contract in order to prevent the employee from competing with them. But what are the conditions for it to be valid? And what penalties is the employee exposed to in case of non-compliance?
The non-compete: what is it exactly ?
This is a clause provided for in the employment contract, in an amendment to the contract or in the collective agreement. The objective is to force the employee not to compete with his employer, that is to say not to carry out equivalent activities, after the end of his contract. In this case, the latter cannot carry out the same activity on his own behalf or be hired by a competitor company . It is therefore a clause that aims to protect the employer.
Warning ! A non-compete clause is not mandatory and takes effect on the date of the end of the contract, regardless of the method of termination: dismissal, resignation, etc.
What are the conditions to validate a non-compete clause ?
The rules governing the non-compete clause are defined in the Labor Code. To be valid, it must be written in the employment contract or in one of its amendments. Then, it must justify the legitimate interest of the company and relate to a specific activity. In most cases, the employer imposes a non-compete clause on employees who have direct contact with customers: customer advisor, bartender, salesperson, etc.
A non-compete clause is limited in time and space. In general, the duration does not exceed two years and relates to a specific geographical area: a city, a region or a country. Finally, the contract is considered null if there is no financial consideration. The amount varies between ¼ or ½ of the monthly remuneration. This compensation will be paid at the time of the employee’s departure, even in the event of gross negligence. If any of these conditions are not met, then the clause is legally void!
What are the penalties in case of violation ?
In case of a breach of his obligations, the employee will be required to pay the compensation paid by his former employer before his departure and repair the damage suffered by the latter. And by decision of the judge, he will have to cease his activity as soon as possible. However, the employer must be able to prove the violation of the clause before taking the employee to court..