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Post-contractual non-competition clause: In Italy it cannot be terminated

Labor law

Post-contractual non-competition clause: In Italy it cannot be terminated

An interesting decision of the Court of Cassation on the post-contractual non-competition clause gives reason to recall the still existing differences between Germany and Italy in this respect: An essential difference is the amount of the remuneration, Art 2125 codice civile leaves the amount open, the case law considers already approx. 15% to be sufficient, but also already 7,500 Euros per year for a bank employee (Court of Cassation 9790/20) if limited to only one region. In Germany, a minimum amount of 50% of the regular salary, including bonuses and overtime, is prescribed by law (§ 74 II HGB). The post-contractual non-competition clause is therefore much more expensive in Germany than in Italy.

In Germany the maximum duration is two years, in Italy three years, and for executive employees even five years. However, the German employer can release himself from the post-contractual non-competition clause with a notice period of one year during the employment relationship (§ 75a HGB).

The Italian employer does not have this possibility according to a decision of the Court of Cassation of 1 September 2021 (23723/2021). In the case in question, the employer had already informed his employee six years before the termination of the employment relationship that he was no longer interested in the post-contractual non-competition clause. After the termination of the employment relationship, the employee nevertheless sued for compensation, and the cassation judges upheld her claim. According to the Italian legal understanding, the claim for payment of compensation does not arise with the termination of the employment contract, but already with the beginning, since the employee has to adjust his life planning to it. Back to Germany: For managing directors - i.e. company organs - the mandatory 50% p.a. compensation does not apply. Post-contractual competition agreements between a managing director and the company may be void for other reasons, for example if the managing director's professional freedom is inadmissibly restricted. In these cases, the managing director does not receive his compensation on the basis of the agreement (which is void), but as damages if the clause was pre-formulated by the company (see OLG Brandenburg, judgment of 15.12.2020, 6 U 172/18).