The uncompensated post-contractual non-competition clause in Spanish employment contracts
In Spain, we still often find cases in which:
First, the company includes in its employment contracts a post-contractual non-competition clause for a certain period (usually two years) that does not introduce an economic compensation for the worker for such obligation.
Later, after the termination of the employment relationship, the employee’s lawyer sues the company, arguing that the employee has complied with the post-contractual non-competition clause and requests the court to integrate the contract by establishing the appropriate financial compensation omitted.
We must remember:
The worker may ask the court, where appropriate, to declare the agreement null and be released from the commitment not to compete, as the agreement does not comply with Article 21 of the Workers’ Statute.
The employee can even consider claiming compensation from the company for the damages that compliance with the agreement may have caused, provided he/she can prove them (for example, job offers rejected).
However, what the employee can never claim is for the court to integrate the non-competition agreement by setting the financial compensation it deems appropriate. Let alone can the employee pretend to be the one unilaterally determining its amount. Because Article 21 of the Workers’ Statute is a necessary condition for the contract’s validity and legality, its omission renders the agreement null from the start. Among many others, Judgment 485/2019 of the High Court of Justice of Madrid (1st Section) of 3 May 2019.
For further information regarding the uncompensated post-contractual non-competition clause in Spanish employment contracts
This article is not considered legal advice