The manager’s non compete obligation

1.Non-compete obligation during their employment

 

The non-compete agreement is not written in a code; it’s neither a regulatory measure, nor a legal measure. The following constitutes as unfair competition: taking part in or setting up a competing activity before the end of the employment period, creating confusion between the new activity and the firm currently employing the individual, criticising a former employer, or laying off old colleagues.

Within case law, however, there is the manager’s duty of loyalty, which is very similar to the non-compete obligation which concerns the manager. During his employment, the manager cannot set up a competing activity to that of the firm they are managing.

A competing activity is a situation where an activity competes with the activities of others by providing an equivalent service or product at a similar price.

 

2.The manager’s non-compete obligation following their employment

 

At the end of their employment, the manager is once again free to enter into competition with the firm which they were employed by. Although, there are two exceptions:

• A contractual term stipulating adherence to a non-compete obligation, wherein failing to adhere would call into question the contractual responsibility of the manager. However, this clause must not prevent the manager from carrying out a professional activity, so this clause must be subject to time and sector limitations, the nature of which would be tailored to the situation. The violation of a contractual term can entitle the other party to compensation.
• While the manager must be able to be autonomous after the termination of their job, they must refrain from all unfair competition.

 

From then on, the old manager must refrain from any behaviour which contravenes accepted commercial practice.

In conclusion, at the end of their employment, the manager is free to carry out the activities that they wish to, as long as there is no non-compete clause between them and their previous employer.

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