One of the types of investigations most requested from us is related to the collection of evidence to be used in court, in cases of potential violation of the non-compete agreement between employee and company, after the termination of the employment relationship.

The non-compete agreement is a contractual clause that can be introduced by mutual agreement between the employer and the employee according to Italian law. It limits the employee's ability to engage in professional activities in competition with the company following the termination of the employment relationship.

The non-compete agreement is governed by Articles 2125, 2596, and 1751 bis of the civil code, respectively for employees, self-employed individuals, and commercial agents. The employee can agree to a monthly payment that is subject to pension contributions and supplements the salary, or upon termination of the contract, subject to the obligations and tax regime of the severance pay. In the event of a declaration of nullity, the employer can request the return of previously paid amounts.

The civil code associates the non-compete agreement with a duty of loyalty between employer and employee, which has a reciprocal nature.

Effects

The worker who violates such an agreement can be accused of unfair competition, while the company that hires them of parasitic competition. The employer can request the application of a penalty provided in the previous employment contract, and ask the judge to issue an injunction against carrying out work activities in violation of the agreement.
The company cannot reserve an option for unilateral exercise or waiver of the non-compete agreement during or at the termination of the employment relationship.

Jurisprudence

Jurisprudence recognizes certain minimum rights for all categories of workers, which the non-compete clause must respect under penalty of ineffectiveness:
obligation of written form;
maximum duration not exceeding that provided by law (5 years for executives and 3 years for other categories);
non-exclusive limitation of place, time, and object;
the contract's onerousness: the employer must pay a percentage increase in salary, highlighted separately in the employment contract, for the entire duration of the employment relationship, proportional to the duration, territorial extension, and object of the non-compete obligation. Collective bargaining in this sense does not provide for identifying maximums and evaluation parameters for these indemnities, uniform at the national level;
The non-compete agreement must guarantee the worker:
the earning capacity, to ensure an income suitable for their living needs;
the professional potential, not compromising the career and the right to improve their working conditions;
the consistency of employment with professionalism, both acquired during studies and in previous work experiences;
The labor judge can determine the non-existence of one of these conditions in the non-compete agreement, declaring its ineffectiveness.

Provision of Article 2125 of the Civil Code

Sources → Civil Code → BOOK FIVE - On Labor → Title II - On Labor in Business → Chapter I - On Business in General → Section III - On the Employment Relationship

The agreement that limits the performance of the worker's activity, for the time following the termination of the contract, is void if it does not result from a written document [1350, n. 13, 2725], if no compensation is agreed in favor of the worker, and if the restriction is not contained within certain limits of scope, time, and place (1).
The duration of the restriction cannot exceed five years for executives and three years in other cases. If a longer duration is agreed upon, it is reduced to the aforementioned measure [2105, 2557, 2596].

Note
(1) The consideration for the non-compete agreement has an obligatory nature, as it constitutes the consideration for a "non facere," even though it is provided in anticipation of the termination of the employment relationship.

Provision of Article 2596 of the Civil Code

Sources → Civil Code → BOOK FIVE - On labor → Title X - On the regulation of competition and consortia → Chapter I - On the regulation of competition → Section I -
General provisions

The agreement that limits competition must be proven in writing [1341, 2725] (1). It is valid if restricted to a specific area or a specific activity, and cannot exceed a duration of five years [1379].
If the duration of the agreement is not determined or is set for a period longer than five years, the agreement is valid for a duration of five years [2125, 2557] (2).

Note
(1) The written form is required for evidence.
(2) Like Article 2596, Article 81 of the EEC Treaty also prohibits agreements between companies that have the object or effect of preventing, restricting, or distorting competition in the common market.

Provision of Article 1751 bis of the Civil Code

Sources → Civil Code → BOOK FOUR - Obligations → Title III - Individual Contracts → Chapter X - Agency Contract

(1) The agreement that limits competition by the agent after the termination of the contract must be made in writing [2125, 2596]. It must concern the same area, clientele, and type of goods or services for which the agency contract was concluded, and its duration cannot exceed two years following the termination of the contract.
Acceptance of the non-compete agreement entails, upon termination of the relationship, the payment to the commercial agent of a non-commission-based indemnity [1748] (2). The indemnity must be commensurate with the duration, not exceeding two years after the termination of the contract, the nature of the agency contract, and the severance indemnity [1751]. The determination of the indemnity based on the parameters of the previous period is entrusted to negotiation between the parties, taking into account the national economic agreements of the category. In the absence of an agreement, the indemnity is determined by the judge on an equitable basis, also with reference to:
1) the average of the fees collected by the agent during the contract and their impact on the overall turnover in the same period;
2) the reasons for the termination of the agency contract;
3) the extent of the area assigned to the agent;
4) the existence or absence of an exclusivity constraint for a single principal (3).

Note
(1) This article was added by art. 5, Legislative Decree of September 10, 1991, no. 303.

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