Conditions of validity for non-competition agreements

Our Judgment: Conditions of validity for non-competition agreements

(Court of Treviso, Ordinance 11/14 April 2016)

It is permissible for a non-competition agreement with an employee (which restricts the latter from carrying out, on behalf of a competitor, “any activities in a broad sense in competition” with the employer) to be integrated, in terms of interpretation, with the agreement that precludes the worker misusing information about the employer. The extension of this obligation does not imply that the judge cannot redefine the limits on an equitable basis. The consideration of the agreement must be determined or determinable. That is, when the worker is able to have an accurate representation of the consideration offered, the size must be quantifiable at the time of signing the agreement.

In the present case, the Court, by way of an accelerated procedure, agreed with the argument of our firm, considered legitimate, a non-competition agreement entered into for a fixed term (valid for 3 years from the date of agreement). The agreement provided for an annual fee, divided into half-yearly installments, to be paid in the three years of validity of the agreement. In fact, even though there is a delayed payment, the overall consideration is equal to the annual fee multiplied by three years, and is therefore easily quantifiable ex ante.

The Court has, therefore, granted the injunction request in an urgent manner, noting that the danger of irreparable injury is in re ipsa. Highlighting, on the one hand, the number of clients that have already gone astray and its importance. The expected increase in clients consistently neglected in the case, resulted in failure of the contractually agreed penalty to cover the damage actually suffered by the company.

 

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