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  • Legal system, currency, language

    Constitutional. The official currency is the Kwanza (AOA). The official language is Portuguese.

  • Corporate presence requirements & payroll set-up

    A foreign entity may engage employees in Angola with proper payroll registrations, subject to business, corporate and tax considerations. The employer is responsible for withholding from an employee's pay, and delivering to the tax authority, income tax and contributions to Angolan social security. The level of income tax is defined by the government and varies in line with the employee's salary.

  • Pre-hire checks

    Required

    Immigration compliance and pre-hire medical examinations.

    Permissible

    Reference and education checks are permissible.

  • Immigration

    Criminal and medical checks must be issued by competent authorities, a criminal record must be issued by the home country and a medical certificate must be issued by a doctor in the employee’s home country.

    The visa/work permit requirements for overseas nationals to work in Angola are having a recognized travel document valid for the Angolan territory for at least 6 months, being of legal age, not being included in the national list of undesirable persons prohibited from entering into the national territory, not constituting a danger to public order or to social security interests, complying with all health regulations established by the Ministry of Health for entry into the national territory, having an employment contract or promissory employment contract, having a certificate of professional and educational qualifications and curriculum vitae, and obtaining a positive opinion of the competent Ministry.

  • Hiring options

    Employee

    Indefinite-term contract (which is the rule), fixed-term or open-term (ie, a term contract whose termination date has not yet been defined, but that will be terminated as soon as the underlying need for contracting is no longer verified – for example, as a contract to cover absence), part-time contract, telework contract and contract under service commission regime – a particular type of contract for high-level employees which provides flexibility for termination and is not common. The parties may execute an employment contract for a fixed term or open term, which must be done in writing.  Part-time, fixed-term and open-term employees may not be discriminated against due to their status.

    Independent contractor

    Independent contractors may be engaged directly by the company or via a personal services company. Engagement may be subject to misclassification exposure. The factors that tend to indicate an individual is an employee (rather than, for example, a self-employed independent contractor) are the existence of a work schedule, the scheduling of vacation, the worker’s legal subordination to the company, the company’s authority, direction and disciplinary powers, control of punctuality and attendance over the individual, integration into the structure of the company and use of work tools belonging to the company, among others.

    In the event of misclassification, the relationship may be converted into an employment relationship on a permanent basis, and the employer may be liable to pay a fine for non-compliance.

    Agency worker

    Agency workers may only be engaged to fulfill a temporary need for work. The agency work contract duration depends on the underlying reason for hiring and does not typically exceed 12 months. Agency workers have the right to equal treatment to employees in relation to pay and other regular benefits.

  • Employment contracts & policies

    Employment contracts

    Written employment contracts are common but not mandatory, except for fixed-term, part-time, telework and service commission regime contracts as well as contracts with foreign employees and underage employees. Employment contracts cannot contain conditions that are less favorable to employees than mandatory employment legislation.

    Probationary periods

    Permissible.

    Employment contracts for an unlimited period of time may be subject to a probation period corresponding to the first 60 days of performance of work; the parties may, by written agreement, reduce or waive this period.

    The parties may extend the probation period, in writing, to up to 4 months in case of employees who perform highly technical, complex work that is difficult to evaluate, and to up to 6 months in case of employees who perform management duties.

    In an employment contract for a limited period of time, the parties may set forth a probation period in writing, and its duration cannot exceed 15 days in case of non-qualified employees, or 30 days in case of qualified employees. Angolan law does not define qualified and non-qualified, but the common practice is that qualified employees correspond to positions that involve technical complexity, a high degree of responsibility or special qualifications as well as those carrying out functions of trust.

    Policies

    Employers with more than 50 employees must, in order to organize the work and labor discipline, draft and approve employee handbooks, guidelines, instructions, service orders and work rules defining rules for the technical organization of work, performance of work and work discipline, delegation of powers, employee job descriptions, safety, hygiene and health protection of work, performance indicators, a remuneration system, working hours for the several sections of the company or work center, control of entrances and exits and circulation within the premises of the company, and surveillance and control of production.

    Employers with 50 or fewer employees may, but are not required to, implement employee handbooks on the matters described above.

    Third-party approval

    Whenever the employee’s handbook or any other rules and regulations establish rules on performance and discipline, remuneration systems, work performance or safety, hygiene and health protection at work, the employer must forward such regulations for information and registration purposes to the General Labor Inspectorate.

  • Language requirements

    Portuguese. Nevertheless, employment contracts and other documents may be drafted in a bilingual template.

  • Minimum employment rights

    Employees entitled to minimum employment rights

    All employees are entitled to minimum employment rights.

    Working hours

    Maximum daily and weekly working hours are 8 hours per day and 44 hours per week. Overtime pay is required for hours worked in excess of these limits. These limits are inapplicable to employees who perform direction and leadership duties, duties of inspection, or provide direct support to the employer. In case the employee usually performs their work outside the company's premises, an exemption regime may also be agreed upon by the parties, in which case those limits shall not apply. Typically, employees under the exemption regime are entitled to an exemption bonus.

    Overtime

    Overtime may occur with an extraordinary increase in workload, to prevent serious damage or if due to majeure force. It is subject to the following maximum limits: (a) 2 hours per day, (b) 40 hours per month and (c) 200 hours per year.

    Overtime must be compensated with additional payment (ie, an increase of hourly rates) up to 30 hours per month: 50 percent. 30 percent, 20 percent and 10 percent depending on whether it is a large, medium, small or micro company dependent on number of employees and turnover. A company which is a subsidiary or branch of a company with headquarters abroad always qualifies as a large company. Overtime that exceeds that limit is paid for each hour at an additional 75 percent, 45 percent, 20 percent and 10 percent depending on whether it is a large, medium, small or micro company.

    Wages

    The minimum wage is established by Presidential Decree. It is set out as a general minimum wage, but there is also a minimum wage for trade and extractive industry groups, transport services and manufacturing groups and agriculture groups. Under the Decree currently in force, the general minimum wage is AOA21,454.10. The following sector-specific minimum wages also apply:

    • Trade and extractive industry groups: AOA32,181.15
    • Transport services and manufacturing groups: AOA26,817.63 and
    • Agriculture groups: AOA21,454.10.

    Vacation

    Minimum 22 working days per year, plus 12 public national holidays.

    Sick leave & pay

    Employees are entitled to take off as much time as they need for sick leave. For large and medium companies: In case of incapacity to work due to illness or common accident, pay is required in the amount corresponding to 100 percent of the base salary for a period of 2 months. For as long as the employee is not entitled to protection in case of illness or common accident from the social security authorities, the employer must pay to the employee 50 percent of salary from the 3rd to the 12th month.

    In case of small and micro companies: The employee is paid, in case of illness or common accident, the amount of 50 percent of the base salary within 90 days, after which the contract is terminated by expiration if the condition of illness remains.

    Maternity/parental leave & pay

    A pregnant employee is entitled to a paid maternity leave of 3 months. The amount of the maternity allowance is equal to the average of the 2 best monthly salaries from the 6 months preceding the commencement of the maternity leave. The maternity allowance is paid directly by the employer to the employee and, subsequently, the Social Security services reimburse the employer in full. Fathers are not entitled to any leave on the birth of a child; it is only considered as a justifiable reason for absence from work for 1 day.

  • Discrimination

    Discrimination based on the following protected characteristics is prohibited: race, color, gender, ethnic origin, marital status, origin or social rank, religious beliefs, political opinion, union affiliation and language.

  • Benefits & pensions

    Both employer and employee must pay contributions to social security in Angola to cover various employee benefits (eg, maternity leave payment and retirement pension). The employer must withhold the contribution due by the employee and deliver both contributions (ie, employer and employee) to social security every month.

    Current general rates are 3 percent of the gross wage for the employee and 8 percent for the employer.

    Employees with a minimum contributory period (ie, 35 years) qualify for a retirement pension at age 60 or in cases of total incapacity.

    Employers have no legal obligation to provide complementary or supplementary social benefits in addition to the social coverage provided for by the social public scheme. However, some companies – mostly large companies or multinational companies who have their own schemes worldwide – set up and provide private complementary health and pension schemes to their employees.

  • Data privacy

    The Data Privacy Law No. 22/11, June 17 governs Angolan data privacy and determines, in general terms, how to collect, use, disclose, store and give access to "personal information."

    There is no specific regulation on employee data privacy.

  • Rules in transactions/business transfers

    Provided that the same business activity is maintained, the new employer takes the position of the former employer in the employment contracts and takes their position in respect of the rights and obligations arising from the employment relationships. This is the case even if the employment contract is terminated before the transfer. The new employer takes their position as the employer of such former employees in respect of due and non-paid credits. All credits, rights and obligations of the employer arising from the execution and implementation of the employment contract, its violation or termination are subject to a statute of limitations of 1 year starting on the day following the day of termination of the contract. Employees keep the same seniority and acquired rights which they had in the service of their former employer.

    The new employer undertakes the obligations of the former employer limited to those incurred during the 12 months prior to the modification, provided that, up to 22 business days prior to the modification, the new mployer gives notice to the employees that they must claim their credits up to the 2nd business day prior to the date scheduled for such modification. Within 22 business days following the modification of employer, the employees have the right to terminate the employment contract with prior notice, but this does not confer any right to compensation.

  • Employee representation

    Employee representative bodies are permissible but not mandatory.

    Trade unions are not common in Angola.

    In order to carry out their duties, trade union representatives are entitled to 4 paid hours a month but must notify the employer in advance of the date and number of days they require for the exercise of trade union functions. Employers are obliged to provide a suitable place for workers' meetings whenever this is requested by the union representatives. Special protections against dismissal are granted to employees who perform, or have performed, duties as union representatives, either as leaders or delegates, or members of the employees’ representative body performing union-related activities.

  • Termination

    Grounds

    Unilateral termination by the employer: dismissal based on objective grounds (ie, redundancy reasons); disciplinary dismissal with just cause (ie, based on serious breach of the employee's duties).

    Termination without cause (with notice): only for employees hired under an employment contract of service commission regime (a particular type of contract for high-level employees which provides flexibility for termination but is not common).

    Other termination causes: mutual agreement, termination by the employee (ie, termination with notice or constructive dismissal with just cause), expiration (ie, fixed-term and open-term contracts or retirement).

    Employees subject to termination laws

    All employees.

    Restricted or prohibited terminations

    Special protection against dismissal is granted to employees who perform, or have performed, duties as union representatives, either as leaders or delegates, or members of the employees’ representative body performing activities; women covered by the regime of maternity protection; war veterans as per the definition provided by the applicable law; employees under the legal age; employees with a reduced work capacity or with a disability degree equal or higher than 20 percent.

    As a general rule, a copy of the notice served on the employee must be forwarded to General Labor Inspectorate.

    Third-party approval for termination/termination documents

    Except in respect of protected employees, third-party approval is not required to terminate an employment.

    Mass layoff rules

    If economic, technological or structural circumstances occur, which may be clearly demonstrated and which involve an internal reorganization or conversion, or the reduction or the shutting down of activities, which makes it necessary to eliminate or significantly change job positions, the employer may terminate the employment contracts of the employees who perform such job positions.

    Collective dismissal rules are triggered if the dismissal involves at least 20 employees.

    Information to the General Labour Inspectorate is required. However, there is no need to obtain approval for termination.

    The General Labor Inspectorate may undertake the diligence deemed necessary for clarification of the situation and, in case of a collective dismissal, during the period in which the evaluation of the General Labor Inspectorate occurs, the employer may promote a meeting with the representative body or with the committee appointed for the purpose of exchange of information and clarification and may forward the conclusions of the meetings to the General Labor Inspectorate.

    Notice

    For individual dismissals based on objective grounds (up to 20 employees): the employer must forward, at least 30 days in advance, prior notice of dismissal to the employee or employees who occupy the job positions to be extinguished or transformed.

    For collective dismissal: the prior notice is 60 days.

    Notice periods in case of term contract: 15 business days if its duration is equal to or higher than 3 months.

    Statutory right to pay in lieu of notice or garden leave

    Payment in lieu of notice is permitted (and required if the notice period is not honored).

    Garden leave is allowed during the notice period.

    Severance

    Fair dismissal based on objective grounds (redundancy/collective dismissal):

    • Large companies: compensation corresponds to 1 base salary for each year of effective service up to the limit of 5 and an additional 50 percent of the base salary multiplied by the number of years of service that exceed such limit
    • Medium companies: compensation corresponds to 1 base salary for each year of effective service up to the limit of 3 and an additional 40 percent of the base salary multiplied by the number of years of service which exceed such limit
    • Small companies: compensation corresponds to 2 base salary and an additional 30 percent of the base salary multiplied by the number of years of service which exceed the limit of 2 years
    • Micro companies: compensation corresponds to 2 base salary and an additional 20 percent of the base salary multiplied by the number of years of service which exceed the limit of 2 years

       

      Fair disciplinary dismissal: no severance.

      Higher severance payments may be agreed and are usual as a way to avoid litigation.

  • Post-termination restraints

    A clause of the employment contract which restricts the activity of the employee for a period of time, which may not exceed 3 years from the termination of the contract, is lawful if the following conditions are met: (a) such clause is included, in writing, in the employment contract, or in its addendum; (b) the activity performed may cause real damage to the employer and may be considered as unfair competition; (c) the employee is paid a salary during the period of restriction of work: the corresponding amount will be included in the contract or its addendum, and it must be taken into account, in its calculation, the fact that the employer may have incurred in significant expenses in the professional training of the employee.

    A clause which requires an employee who benefits from professional improvement or higher level education at the expense of the employer to remain at the service of the same employer for a certain period of time, provided that such period does not exceed 1 year, in case of training of professional improvement and up to 3 years in case of courses of high level education, is also lawful if established in writing. In this case, the employee may release themselves from remaining at the employer’s service by repaying to the employer the amount of the expenses incurred by the employer, in proportion to the remaining time until the term of the agreed period. The employer that hires the employee within the period of restriction of activity in the company is jointly liable for the damages caused by the employee or for the amount not returned by the employee.

  • Waivers

    In principle, statutory rights cannot be waived and any waiver of such rights will be null and void.

  • Remedies

    Discrimination

    Fine corresponding to 5 to 10 times the average salary paid by the company.

    Unfair Dismissal

    The employee may challenge the validity of the dismissal before the labor courts.

    If the relevant court declares the dismissal to be unlawful, by final judgment, the employer must immediately re-instate the employee in the same job position and benefiting from the same previous conditions, or, alternatively, shall indemnify the employee (compensation is different depending on whether it is a large, medium, small or micro company and the cause of dismissal).

    In addition to re-instatement or the compensation, the employee is entitled to the base salaries they would have received if they had continued to perform work, until the date on which the employee finds a new job or up to the date of final judgment, whichever comes first, with a maximum limit of 6 months of base salary for large companies, 4 months to medium companies and 2 months for small and micro companies.

    Failure to inform and consult

    Not applicable.

  • Criminal sanctions

    Typically, non-compliance with employment laws leads to administrative proceedings which may lead to the payment of fines. If such non-compliance is based on violation of rights that deserve protection under criminal law, it may also lead to this type of judicial proceedings.

  • Key contacts

Post-termination restraints

Angola

A clause of the employment contract which restricts the activity of the employee for a period of time, which may not exceed 3 years from the termination of the contract, is lawful if the following conditions are met: (a) such clause is included, in writing, in the employment contract, or in its addendum; (b) the activity performed may cause real damage to the employer and may be considered as unfair competition; (c) the employee is paid a salary during the period of restriction of work: the corresponding amount will be included in the contract or its addendum, and it must be taken into account, in its calculation, the fact that the employer may have incurred in significant expenses in the professional training of the employee.

A clause which requires an employee who benefits from professional improvement or higher level education at the expense of the employer to remain at the service of the same employer for a certain period of time, provided that such period does not exceed 1 year, in case of training of professional improvement and up to 3 years in case of courses of high level education, is also lawful if established in writing. In this case, the employee may release themselves from remaining at the employer’s service by repaying to the employer the amount of the expenses incurred by the employer, in proportion to the remaining time until the term of the agreed period. The employer that hires the employee within the period of restriction of activity in the company is jointly liable for the damages caused by the employee or for the amount not returned by the employee.

Argentina

Non-compete, customers and services providers, non-solicitation and employee non-solicitation clauses are often used, especially when the employer and employee negotiate the terms and conditions of the termination of the employment.

Restrictive covenants may be enforced post-employment, provided the employee receives compensation for the restrictions. Therefore, consideration is required for valid restrictive covenants. The amount must be fair and in accordance with the salary of the employee, their position in the company, the agreements that the company intends to impose and the extent (ie, period and territory) of the restrictive covenant.

The law does not specifically regulate restrictive covenants. However, most restrictive periods range between 2 and 5 years. Under certain circumstances, the court has enforced a 10-year post-termination restraint period, based on the business and the amount of consideration paid to the employee.

Where an employee is in breach of an agreement, the employer may file a claim against the employee in court requesting compensation for damages. The complaint may include injunctive relief to stop the violation immediately. Alternatively, courts may declare the covenant null and void if it has been drafted too widely.

Australia

Those that protect the employer's legitimate business interests may be enforced to the extent reasonably necessary to protect those interests in all circumstances.

Non-competes

Typically no longer than 12 months, with some exceptions.

Customer non-solicits

Permissible.

Employee non-solicits

Permissible.

Austria

Those that protect the employer's legitimate business interests may be enforced if reasonable. Garden leave is common for senior employees.

Non-competes

For special employees with a higher income permitted, but not longer than 12 months. If the non-competition clause is valid and enforceable (depending if (i) the employee terminates the employment, if (ii) the employment relationship has been terminated by the employer for good reason with immediate effect or if (iii) the employee has terminated the employment with immediate effect without good reason), there is no requirement for payment during the non-competition period. If it is not enforceable (eg, if the employer terminates the employment without good reason), the employer may pay the salary during the non-competition period in order to make the non-competition clause enforceable.

Customer non-solicits

Permissible in narrow circumstances.

Employee non-solicits

Permissible.

Bahrain

It is permissible to have restrictive covenants contained in the contract of employment to the extent necessary to protect the legitimate interests of the employer, provided the nature of the employee's work allowed them to know the company's clients and/or know the secrets of the business.

Covenants must be restricted in relation to their duration (which must not exceed 1 year), geographical scope and the nature of the business to be protected.

Parties are permitted to include a liquidated damages clause in the contract of employment, as it is difficult to obtain an injunction in Bahrain, but contractual provisions imposing a penalty (rather than a genuine estimate of the loss incurred) are likely to be unenforceable.

Non-competes

Typically no longer than 6 to 12 months.

Customer non-solicits

Typically no longer than 6 to 12 months.

Employee non-solicits

Permissible.

Belgium

Those that protect the employer's legitimate business interests may be enforced if reasonable.

Non-competes 

Strict conditions. In principle no longer than 12 months. Non-compete indemnity due equal to 1/2 of the remuneration due for the period of non-compete obligation, except for a non-compete in an employment contract for sales representatives.

Customer non-solicits 

Permissible, but only enforceable if reasonable.

Employee non-solicits

Permissible, but only enforceable if reasonable.

Brazil

Brazilian law does not address post-termination restraints. Therefore, enforcement of post-termination restraints may be challenging.

Non-competes

Periods of up to 24 months have been accepted, but enforceability is more likely for shorter periods (ie, 6-12 months). Case law has upheld non-competes that were limited with regards to scope, territory, timeframe and fair and reasonable payment.

Customer non-solicits

Generally permissible.

Employee non-solicits

Generally permissible, but case law is scarce in this regard.

Canada

These are difficult to enforce. Restrictions must go no further than necessary to protect the employer's legitimate business interests. Garden leave is becoming more common.

Non-competes

Will generally not be enforceable for mere employees and not where a non-solicitation provision would have been sufficient. Must be reasonable in scope geographically and temporally, and in some jurisdictions, must also specify the type of restricted employment and the restricted job functions. Must be clear and unambiguous. A requirement not to interfere with business relationships might also be enforced if it is reasonable, clear and unambiguous.

Customer non-solicits

More likely to be enforced than a non-competition agreement, non-solicitation agreements must still be reasonable in scope geographically and temporally. Must be clear and unambiguous.

Employee non-solicits

Likely to be enforced if reasonable, clear and unambiguous.

Chile

It is not against Chilean law to include post-termination restraints in an employment contract. However, because the Chilean Constitution explicitly protects an employee's right to work, courts may be unwilling to enforce such restraints.

Non-competes

Technically not prohibited, but may be difficult to enforce due to the constitutional protections identified above.

To date, the only post-termination non-competes accepted by the courts are those that provide compensation to the employee to compensate for the prohibition against competing. There are no clear parameters regarding the amount of the bonus and the maximum term of the non-compete – however, a maximum term of 2 years is customary.

Customer non-solicits

Technically not prohibited, but may be difficult to enforce due to the constitutional protections identified above. A customer non-solicit may need to rise to the level of unfair competition in order for a court to enforce the clause.

Employee non-solicits

Technically not prohibited, but may be difficult to enforce due to the constitutional protections identified above.

China

Those that protect the employer's legitimate business interests may be enforced if reasonable.

Non-competes

No more than 2 years. Compensation is required per local rules.

Customer non-solicits

Permissible, but relatively difficult to enforce.

Employee non-solicits

Permissible, but relatively difficult to enforce.

Colombia

Non-competes

Post-termination non-compete clauses or agreements are not enforceable. However, such provisions are typically included in employment agreements because they can have a deterrent effect or create a sense of moral obligation on the part of an employee.

Customer non-solicits

Post-termination customer non-solicits clauses or agreements are not enforceable. However, such provisions are typically included in employment agreements because they may have a deterrent effect or create a sense of moral obligation on the part of an employee.

Employee non-solicits

Post-termination employee non-solicits clauses or agreements are not enforceable. However, such provisions are typically included in employment agreements because they may have a deterrent effect or create a sense of moral obligation on the part of an employee.

Czech Republic

Only non-compete clauses are regulated by Czech law. Enforceability of other restrictive covenants is uncertain but should be permissible if reasonable, proportionate and tailored to the situation of the particular employee. Garden leave is not expressly regulated but increasingly common.

Non-competes

Permissible subject to compliance with statutory conditions (ie, maximum duration of 1 year, obligatory compensation of a minimum of 1/2 of average earnings per month, justifiability given the position of the employee and obligatory written form).

Customer non-solicits

Not regulated. Enforceability is uncertain but should be permissible if reasonable, proportionate and tailored to the situation of the particular employee.

Employee non-solicits

Not regulated. Enforceability is uncertain but should be permissible if reasonable, proportionate and tailored to the situation of the particular employee.

Denmark

Non-competes

Under the Danish Act on Restrictive Covenants that entered into force on January 1, 2016, an employee may be subject to a non-competition clause only if they hold a special position of trust, and the clause must indicate the specific circumstances as to why such a clause is necessary.

The compensation is either 40 percent or 60 percent of the monthly salary at the time of termination of the employment, and the first 2 months are considered minimum compensation. The compensation – save for the minimum compensation – may be reduced to 16 percent or 24 percent if the employee gets another suitable job.

For agreements entered into prior to January 1, 2016, a salaried employee may only be subject to a non-competition clause if they hold a trusted position (eg, if they have access to certain, otherwise restricted, information).

Customer non-solicits

After January 1, 2016, an employee may only be subject to a non-solicitation clause regarding customers and business connections with whom the employee has had business relations over the last 12 months immediately prior to termination of the employment. The compensation regime which applies for non-competes also applies to customer non-solicits.

Employee non-solicits

Since January 1, 2016, new rules have reduced employers' ability to use non-poaching and non-solicitation of employees' clauses. Pre-existing clauses are only enforceable if each of the employees whose employment opportunities are affected by the non-hire clause have been informed of the scope of the clause and have given their written consent. In addition, they must each receive compensation (ie, 50 percent of the remuneration during the restricted period) as stipulated in the relevant legislation.

Finland

Non-competition

According to the Employment Contracts Act, a post-termination non-competition obligation is possible for a particularly weighty reason related to the operations of the employer or to the employment relationship. The obligation may limit the employee's right to conclude an employment contract with a competing employer, as well as the employee's right to engage in competing operations on their own account for a maximum of 6 months when no compensation is paid and up to 1 year should the employee be compensated. The restriction concerning length of the obligation is not applied to employees who, in view of their duties and status, are deemed to be engaged in the direction of the company, corporate body or an independent part thereof.

Based on a recent legislative proposal intended to take effect on January 1, 2022, employers must pay a fixed amount of compensation for all post-termination non-competition restrictions. However, the proposal has not yet been passed.

Non-solicitation

Non-solicitation of customers or employees is not regulated by the law. However, such covenants are possible and common. According to case law, such covenants are comparable to non-competition obligations and are therefore subject to the same requirements.

Confidentiality

Post-termination confidentiality clauses are not regulated in the law, but such covenants are common.

France

Restrictive covenants are allowed if justified by the company's business and employee's role.

Non-competes

Allowed under 5 conditions. It must:

  • Be essential to the protection of the company's legitimate interests

  • Be limited in time

  • Be limited in space

  • Take into account the specificities of the employee's duties

  • Provide for a financial compensation – commonly at least 33 percent of the employee's compensation for the duration of the non-compete, but depends on the applicable CBA. CBAs may provide for specific terms.

Customer non-solicits

No legal requirement for a financial compensation, although their validity is currently challenged by the courts, which often consider that they in fact constitute a non-compete restriction and as such should be duly compensated.

Employee non-solicits

Allowed.

Germany

Must be in writing. Those that protect the employer's legitimate business interests may be enforced if reasonable. Garden leave is common for senior employees.

Non-competes

Typically no longer than 6 to 12 months, with a statutory maximum of 2 years. Compensation of 50 percent of the employee's wages is required during the non-compete period.

Customer non-solicits

Permissible in narrow circumstances.

Employee non-solicits

Permissible only if related to illegal poaching; an agreement not to hire employees from a certain business is not enforceable.

Hong Kong, SAR

Those restraints that protect the employer's legitimate business interests may be enforced if reasonable. Garden leave is common for senior employees.

Non-competes

Typically no longer than 3 to 6 months.

Customer non-solicits

Permissible in limited circumstances. Typically no longer than 6 to 12 months.

Employee non-solicits

Permissible in limited circumstances. Typically no longer than 6 to 12 months.

Hungary

Post-termination restraints are common in Hungary for employees in senior positions in order to protect the employer's economic interests for a period post-termination. Such restraints should always be tailored to individual employees.

Non-competes

Permissible for up to 2 years, if specifically included in the parties' agreement, if reasonable in geographical reach and scope, and if the employer pays a sufficient amount of compensation in exchange which, for restraints entered into after July 1, 2012, must be at least 1/3 of the employee's salary.

Customer non-solicits

Permissible, if included in the parties' agreement. Compensation is payable, but since separate compensation is not required for each different type of covenant, compensation for a non-compete also covers a customer covenant.

Employee non-solicits

Permissible, if included in the parties' agreement. Compensation is payable, but since separate compensation is not required for each different type of covenant, compensation for a non-compete also covers an employee covenant.

India

Non-competes

The Indian Contract Act 1872 provides that every agreement by which anyone is restrained from exercising a lawful profession, trade or business of any kind is void. Therefore, non-competition clauses which operate during the course of employment are generally not regarded as restraint of trade. However, post-termination non-competition clauses are void and unenforceable.

Customer non-solicits

Possibly enforceable. With post-termination non-dealing/non-solicit provisions, it may be argued that a restriction on activities with customers is a restraint of trade, if by complying the former employee is prejudicially affected from carrying out any trade. Whether such a clause is enforceable or not is, therefore, dependent on the facts of the case.

Non-solicitation provisions, even if they are upheld, generally only entitle the employer to damages, and it is highly uncommon for an Indian Court to grant an injunction preventing the customer from taking their business elsewhere. At best, a claim for damages may succeed against the employee for breach of their contractual agreement if the employer may show that the enforcement of the provision is essential to protect its confidential information as well as that the provision does not prejudice the former employee's ability to carry on a business or trade and therefore is not in restraint of trade.

Employee non-solicits

Non-solicitation provisions in relation to other employees may be enforced against a former employee, but the courts do not generally grant injunctive relief restraining the employees who are being solicited from leaving the company.

Indonesia

Enforceable by virtue of the principle of freedom of contract, adopted in the Indonesian Civil Code. However, in practice, they are very difficult – and sometimes impossible – to enforce.

Non-competes

Permissible in theory, but very difficult – and likely impossible – to enforce.

Customer non-solicits

Permissible in theory, but may be difficult to enforce.

Employee non-solicits

Permissible in theory, but may be difficult to enforce.

Ireland

Considered in restraint of trade and void. However, those that protect the employer’s legitimate business interests may be enforced if reasonable. Restraints must be tailored for the specific business and the risks posed by the employee. Garden leave is common for senior employees.

Non-competes

Permissible in narrow, justifiable circumstances. Typical duration is no longer than 3 to 6 months with an absolute maximum of 12 months, depending on the circumstances. The geographical area must also be reasonable and not be extensive.

Customer non-solicits

Permissible in specific circumstances. Typical duration is no longer than 3 to 6 months with an absolute maximum of 12 months, depending on the circumstances. The geographical area must also be reasonable and not be extensive.

Employee non-solicits

Permissible. Length of restriction depends on the circumstances.

Israel

Non-competes

Although common, generally not enforceable under current Israeli case law.

Customer non-solicits

Permissible. Typically not longer than 12 months.

Employee non-solicits

Permissible. Typically not longer than 12 months.

Italy

Those that protect the employer's legitimate business interests may be enforced if reasonable.

Non-competes

Typically no longer than 6-12 months. To be valid and enforceable, such clauses must be agreed in writing and limited in scope, territory, time (ie, up to 3 years and up to 5 years for executives) and must provide an adequate compensation – usually around 25 percent to 50 percent of the annual salary for a 1-year non-compete for the entire Italian territory. If such requirements are not met, the clause is null and void.

Customer non-solicits

Permissible.

Employee non-solicits

Permissible.

Japan

Generally enforceable provided that they are reasonable in scope and duration. Japanese courts will closely examine issues such as the geographic scope, whether the restraint is necessary to protect a legitimate business interest and whether consideration was given to the employee.

Non-competes

Generally permitted subject to the limitations noted above, and non-competition covenants should satisfy at least the following conditions in order to be held enforceable:

  • The duration is reasonable*
  • The geographical scope is reasonably limited and
  • The types of jobs or businesses subject to the restriction are limited to jobs or businesses that compete directly or indirectly with the former employer's actual business.
*No maximum is set by law, but 6 months to 1 year is common.

Customer non-solicits

Generally permitted, but enforceability will depend on the facts of the given case.

Employee non-solicits

Generally permitted, but enforceability will depend on the facts of the given case as employees have a constitutional right to move to another company.

Kenya

Generally not enforceable. However, those that protect the employer's legitimate business interests may be enforced if reasonable. Must be tailored for the specific business and the risks posed by the employee.

Non-compete

Permissible during employment, but only enforceable in narrow, justifiable circumstances post-termination. Usually contractually agreed upon between the employer and employee.

Customer non-solicit

Permissible during employment, but only enforceable in narrow, justifiable circumstances post-termination. Usually contractually agreed upon between the employer and employee.

Employee non-solicit

Permissible during employment, but only enforceable in narrow, justifiable circumstances post-termination. Usually contractually agreed upon between the employer and employee.

 

Kuwait

It is permissible to have restrictive covenants contained in the contract of employment, provided that the employee has become acquainted with the employer's clients or the secrets of the business and the covenants are reasonably drafted in relation to their duration, geographic scope and the nature of the business to be protected.

Parties are permitted to include a liquidated damages clause in the contract of employment as it is generally not possible to obtain an injunction in Kuwait; however, any such penalty should not be exorbitant.

Non-competes

Typically no longer than 12 to 24 months.

Customer non-solicits

Typically no longer than 12 to 24 months.

Employee non-solicits

Permissible.

Luxembourg

Non-competes

A non-compete clause must be in writing, and it is deemed null and void when the employee signing the contract of employment is under 18 years of age and/or if the employee's annual remuneration when they leave the employer does not exceed EUR56,906.18 (index 834.76).

A non-compete clause is only valid if it anticipates an employee working as an independent contractor. The non-compete clause is only effective if the restriction:

  • Applies to a specific professional sector and to similar activities to those carried out by the former employer
  • Does not exceed 12 months and
  • Is limited to a geographical area where the employee would be in a position to effectively compete with their former employer and take into consideration the nature and scope of the relevant activities

Customer non-solicits

Valid under Luxembourg law to the extent that they do not aim at limiting the employee's right to work as provided for in the Luxembourg constitution.

Employee non-solicits

Valid under Luxembourg law to the extent that they do not aim at limiting the employee's right to work as provided for in the Luxembourg constitution.

Malaysia

Non-competes

Void and unenforceable pursuant to Section 28 of the Contracts Act 1950, as the former employee is "restrained from exercising a lawful profession, trade, or business."

Customer non-solicits

Valid and enforceable only to the extent that there has been a breach of confidentiality, or misuse of confidential information or trade secrets.

Employee non-solicits

Valid and enforceable only to the extent that there has been a breach of confidentiality, or misuse of confidential information or trade secrets.

Mexico

Non-competes

Post-termination non-compete clauses or agreements are not enforceable. However, such provisions are typically included in employment agreements because they can have a deterrent effect and may create a sense of moral obligation on the part of an employee.

Customer non-solicits

Post-termination customer non-solicit clauses or agreements are not enforceable. However, such provisions are typically included in employment agreements because they can have a deterrent effect and may create a sense of moral obligation on the part of an employee.

Employee non-solicits

Post-termination employee non-solicit clauses or agreements are not enforceable. However, such provisions are typically included in employment agreements because they can have a deterrent effect and may create a sense of moral obligation on the part of an employee.

Morocco

Non-competes

Permitted if limited in time and space. Usually 1 year maximum and 200 km maximum surrounding the place of work.

Customer non-solicits

Permitted if limited in time. Usually 1 year maximum.

Employee non-solicits

Permitted if limited in time. Usually 1 year maximum.

Mozambique

It is permissible to have restrictive covenants in the employment contract related to confidentiality, non-compete and non-solicitation after termination of the contract. However, there is no precedent where these kinds of clauses have been discussed in a court in Mozambique. In principle, these kinds of clauses would not be reviewed by a labor court, but rather by a civil court.

Non-competes

Permissible although not commonly enforced.

Customer non-solicits

Permissible although not commonly enforced.

Employee non-solicits

Permissible, but not common.

Myanmar

Non-competes

The labor legislation does not regulate non-compete clauses; employers may include such provisions in employment documentation. Sometimes their inclusion might raise issues at the time of registration of the contract with the TLO.

Customer non-solicits

These provisions are often included in executive level employment contracts, but are not regulated by law and sometimes raise issues at the time of registration of employment contracts with the TLO.

Employee non-solicits

Same as customer non-solicits.

Netherlands

Non-competes

Post-employment restraints to protect against competition are common in the Netherlands and are included in almost every employment agreement. Typically, such restraints remain in effect for up to 1 year after termination of employment. Non-competition clauses in fixed-term employment contracts are not allowed unless they are necessary to protect a legitimate business interest and the business interests are clearly described in the employment agreement. Published rulings have shown that this is a high threshold; therefore, it is common not to include a non-competition clause in fixed-term employment agreements.

No payment required for enforceability.

Customer non-solicits

Permissible under the same conditions as described above under non-competes.

Employee non-solicits

Permissible.

New Zealand

Restraints in New Zealand are enforceable only if the restriction is no more than is reasonably necessary to protect the legitimate proprietary interests of the employer.

Non-competes

Permissible, generally ranging from nothing for junior employees to around 12 months for the most senior executive employees.

Customer non-solicits

Permissible.

Employee non-solicits

Permissible.

Nigeria

Non-competes

A post-termination non-compete is only enforceable if it is reasonable with reference to the interest of the parties concerned and of the public. In deciding the question of reasonableness, the courts consider the nature of the trade or occupation, the geographical area over which the restraint is imposed and the length of time for which it is to continue.

Customer non-solicits

A post-termination customer non-solicit is only enforceable if it is reasonable with reference to the interest of the parties concerned and of the public. In deciding the question of reasonableness, the courts consider the nature of the trade or occupation, geographical area over which the restraint is imposed and the length of time for which it is to continue.

Employee non-solicits

A post-termination employee non-solicit is only enforceable if it is reasonable with reference to the interest of the parties concerned and of the public. In deciding the question of reasonableness, the courts consider the nature of the trade or occupation, geographical area over which the restraint is imposed and the length of time for which it is to continue.

Norway

Non-competes

Permissible, subject to specific criteria. No longer than 12 months. Must be in writing.

Customer non-solicits

Permissible, subject to specific criteria. No longer than 12 months.

Employee non-solicits

Permissible between employee and employer. Generally not permissible between employers, except for up to 6 months in relation to the sale of businesses.

Oman

It is permissible to have restrictive covenants contained in the contract of employment, provided that:

  • The employee has become acquainted with the employer's clients or the secrets of the business and
  • The covenants are reasonably drafted in relation to their duration, geographic scope and the nature of the business to be protected.

Parties are permitted to include a liquidated damages clause in the contract of employment as it is not possible to obtain an injunction in Oman.

Article 661 of Royal Decree No. 29/2013 issuing the Civil Transactions Law of Oman (CTL) states that:

  • If the work of the employee is such that they are permitted to have access to work secrets or to make acquaintance with the customers of the business, both parties can agree that the employee may not compete with the employer or engage in an employment which competes with it after the termination of the contract. However, such agreement shall not be valid unless it is:
    • Limited in time
    • Restricted as to place and
    • Specific as to the type of work the employee can undertake, all as necessary to protect the lawful interests of the employer.
  • It shall not be permissible for the employer to rely on a non-compete agreement if the employer  terminates the contract without justification (ie, if there is no action on the part of the employee justifying termination), and likewise it shall not be permissible for the employer to rely on the non-compete agreement if it commits any act which justifies the employee's resignation in response (ie, if the employer's action justifies the employee terminating the contract).

Non-competes

Typically no longer than 6 to 12 months.

Customer non-solicits

Typically no longer than 12 to 24 months.

Employee non-solicits

Permissible. Typically no longer than 12 to 24 months.

Peru

Subject to comments below, it is common in Peru for companies to include or negotiate non-compete, non-solicitation and non-poaching clauses to prevent employees from competing with the employer after termination. Further, post-termination confidentiality obligations are included in termination agreements.

Non-competes

Post-termination non-compete obligations are not enforceable under Peruvian law. However, in practice, employers include them in termination agreements and/or employment agreements for a potential deterrent effect on employees. To ensure that the employee complies with the non-compete, some companies pay compensation after successful completion of the non-compete period.

Customer non-solicits

Customer non-solicits are generally permissible. Peruvian law classifies as “sabotage” any actual or potential action which would, without cause, damage the business activity of another economic entity by means of interfering in the relationship with its employees, clients and other individuals, in order to induce the latter not to fulfill any obligation.

Employee non-solicits

Employee non-solicits are generally permissible. As indicated in the previous paragraph, solicitation of employees amounts to "sabotage."

Philippines

An employer, in the exercise of its management prerogative, may insist on an agreement with an employee for certain prohibitions to take effect after the termination of the employer-employee relationship.

Non-competes

The employer and employee are free to stipulate in an employment contract prohibiting the employee within a certain period from and after termination of their employment from

  • Starting a similar business, profession or trade or
  • Working in an entity that is engaged in a similar business that might compete with the employer There must be a limitation as to time, place and trade. Courts have found a 2-year prohibition reasonable.

Customer non-solicits

A non-solicitation clause may be a stipulation agreed upon by the employer and employee in an employment contract.

Employee non-solicits

A non-recruitment or anti-piracy clause is a stipulation that may be agreed upon by the employer and employee in an employment contract.

Poland

Post-termination restraints – in particular, the confidentiality obligation – result from the statutory provisions or are imposed on the employee upon the separate agreement between the parties. Contractual post-termination covenants are relatively common in Poland in relation to employees who, during their employment, have access to particularly important information (eg, senior executives).

Non-competes

Parties to an employment relationship may enter into a non-compete agreement which will be effective during the term of employment as well as after the employment relationship has ceased. A non-compete agreement must be concluded in writing in order to be valid. A non-compete agreement effective after the termination of employment must specify the period of prohibition of competition, the scope of the non-compete restriction and the amount of compensation due to the employee. The compensation must not be lower than 25 percent of the remuneration received by the employee prior to the termination of the employment relationship for a period corresponding to the period of validity of the prohibition of competition. Polish law allows such compensation to be paid in monthly installments.

Customer non-solicits

Statutory prohibition to induce the employer's clients to terminate, not to fulfill or improperly fulfill their contractual duties with an aim for the inducing person to gain benefits for themselves or for a third party or to cause damage to the employer.

Employee non-solicits

Statutory prohibition to induce the person performing work for the employer not to perform or improperly perform their contractual duties with the aim for the inducing person to gain benefits for themselves or for a third-party or to cause damage to the employer.

Portugal

Post-termination restraints aimed to protect the employer's legitimate business interests may be enforced, provided that the activity carried on by the employee may cause a potential loss to the employer.

The following types of obligations may be included in the initial employment contract, or may be part of a specific written agreement mandatorily containing:

  • An undertaking on non-competing and/or non-solicitation by the employee
  • The scope of the obligation (ie, activity and territory)
  • The period of the limitation (the legal maximum is 2 years – 3 years in cases of jobs of trust or jobs with access to information of particular relevance) and
  • The amount to be paid to the employee during the period of the limitation – the law does not provide any criteria, but usually it varies between 50 percent and 80 percent of the last monthly remuneration.

In case these legal requirements are not fulfilled, the employee shall not be validly bound.

Non-competes

Permissible under the abovementioned rules.

Customer non-solicits

Permissible under the abovementioned rules.

Employee non-solicits

Permissible under the abovementioned rules.

Qatar

It is permissible to have restrictive covenants contained in the contract of employment to the extent necessary to protect the legitimate interests of the employer, provided the nature of the employees’ work allowed them to know the company's clients and/or know the secrets of the business.

The covenants must be restricted in relation to duration (which must not exceed 2 years), geographical scope and the nature of the business to be protected.

Non-competes

Typically no longer than 6 to 12 months.

Customer non-solicits

Typically no longer than 6 to 12 months.

Employee non-solicits

Permissible.

Romania

Non-competes

The parties may negotiate a post-termination non-compete clause prohibiting the employee from performing an activity competing with the one performed for their (previous) employer.

In order to be valid, a non-compete clause must specify certain minimum content as required by the Romanian Labor Code:

  • The prohibited activities
  • The amount of the non-competition indemnity The duration of the prohibition
  • The third parties for which the employee cannot perform the prohibited activities
  • The prohibited territory

As a non-compete restraint represents an exception from the principle of freedom of work, failure to comply with the legal conditions for implementing such a clause may render the clause void.

Customer non-solicits

Not expressly regulated by the law. May arguably be included within the scope of a non-compete clause.

Employee non-solicits

Not expressly regulated by the law. May arguably be included within the scope of a non-compete clause.

Russia

Generally unenforceable.

Non-competes

Generally unenforceable.

Customer non-solicits

Generally unenforceable.

Employee non-solicits

Generally unenforceable.

Saudi Arabia

Restraints that protect the employer's legitimate business interests may be enforced if reasonable.

Non-competes

Non-compete clauses are honored as long as they are in writing and specified in terms of place, duration (ie, no longer than 2 years) and type of work. If there is no written agreement, or an express non-compete clause is not included in an employment contract, the law will not impose any restrictions.

Customer non-solicits

Permissible in narrow circumstances.

Employee non-solicits

Permissible.

Singapore

Covenants in restraint of trade, such as non-competes and non-solicits, are prima facie void in Singapore. They are only considered enforceable if they can be shown to be reasonable, such as by proving that they are required to protect the legitimate proprietary interests of the employer, and go no further than is reasonably necessary to protect those interests (especially in duration, scope and geographical area of coverage). The courts have recognized 3 legitimate proprietary interests thus far: an employer's trade secrets and confidential information, the protection of trade connections and the maintenance of a stable trained workforce.

Slovak Republic

Non-competes

Where an employee may acquire information or knowledge that is not normally available and the use of which could cause substantial harm to the employer, the parties may agree in the employment contract that, for a maximum of 1 year after the termination of the employment, the employee shall not pursue any gainful activity which is competitive in character with the employer's activity.

The employer must provide appropriate financial compensation to the employee in the amount of at least 50 percent of the employee's average monthly earnings for each month of the commitment. The employee and the employer may agree in the employment contract on appropriate financial compensation which the employee is obliged to pay if they breach the agreed obligation.

Customer non-solicits

Customer non-solicits are not regulated by the Slovak Labor Code, and therefore, their enforceability is questionable. Furthermore, if agreed, they usually serve only as a deterrent. Soliciting of customers cannot be sanctioned (eg, by a contractual penalty), as the Slovak Labor Code does not permit this.

Employee non-solicits

Employee non-solicits are not regulated by the Slovak Labor Code, and therefore, their enforceability is questionable. Furthermore, if agreed, they usually serve only as a deterrent. Soliciting of employees cannot be sanctioned (eg, by a contractual penalty), as the Slovak Labor Code does not permit this.

South Africa

In principle, enforceable, with the party seeking to escape its effect having the onus of proving that the restraint ought not to be enforced, for being unreasonable and against public policy. The enforcing party must, however, be able to show that there is a proprietary interest worthy of protection, and the limitations to competition must not go beyond what is reasonably necessary to protect such legitimate business interest. Furthermore, the restraint must be reasonable as regards the nature, duration and the geographical area in which the restraint applies. Proprietary interests include client relationships and trade secrets.

Non-competes

Permissible, in principle, if the employer has a proprietary interest worthy of protection and the restraint goes no further than necessary to protect that interest and the restraint is reasonable as regards the nature, duration and the geographical area in which it applies. A restraint period of 12 months is generally regarded as reasonable.

Customer non-solicits

Permissible.

Employee non-solicits

Permissible.

South Korea

Restrictive covenants are generally enforceable in South Korea, provided they are reasonable and protect an employer's trade secrets.

Non-competes

Enforceable if reasonable and necessary to protect the employer's trade secrets.

Customer non-solicits

Enforceable if reasonable and necessary to protect the employer's trade secrets.

Employee non-solicits

Enforceable if reasonable and necessary to protect the employer's trade secrets.

Spain

Those aimed at protecting the employer's legitimate business interests may be enforced provided that:

  • The employee receives adequate consideration
  • The restraints do not exceed 2 years for qualified employees and 6 months for non-qualified employees

Non-competes

Permissible under the abovementioned rules.

Once agreed upon, the employer cannot unilaterally waive, and therefore must pay the agreed-upon compensation. This restriction is usually agreed upon with high-profile employees only.

Customer non-solicits

Permissible under the abovementioned rules. Extensive solicitation may also be subject to civil law claims under unfair competition rules.

Employee non-solicits

Permissible under the abovementioned rules. Extensive solicitation may also be subject to civil law claims under unfair competition rules.

Sweden

There are no specific statutory rules under Swedish law prohibiting post-contractual restraints. Instead, the rules are normally contained in collective bargaining agreements and individual employment agreements, which may allow post-contractual restraints under certain circumstances. However, such restraints may be deemed unreasonable and set aside or adjusted by a Swedish court. If the employee is provided with compensation (at least 60 percent of the employee's monthly salary) during the restricted period, the chances of the restrictions being enforceable are typically higher.

Non-competes

Normally 9 months, but at most 18 months. The latter normally only applies in exceptional circumstances. In order for a non-competition clause to be valid, the employee must be entitled to compensation during the restricted period. The compensation does not need to exceed 60 percent of the employee's previous salary with the employer. Moreover, a non-competition clause may only be used for employees with key or management positions.

Customer non-solicits

Permissible, but may be adjusted by a court ruling.

Employee non-solicits

Permissible. Non-solicitation clauses should not, however, extend beyond the legitimate interest to equalize the competitive advantage gained by the employee through the knowledge of the former employer's employees. Moreover, a non-solicitation clause may only be used for employees with key or management positions.

Switzerland

Non-competes

Possible, provided the working relationship allows for employees to have knowledge of their employer's clientele or manufacturing or commercial secrets. Non-competition clauses based on knowledge of the client are, in principle, unacceptable in circumstances where the relationship between employees and clients is essentially a personal one, based on employees' abilities and their particular relationships with clients. The restraint must be appropriately restricted with regard to place, time and scope so that it does not unfairly compromise the employee's future economic activity. Typically no more than 1 year, if based on the knowledge of the employer's clientele, and no more than 3 years, if based on knowledge of manufacturing and commercial secrets.

Customer non-solicits

Permissible, with similar restrictions to non-competes.

Employee non-solicits

Permissible, with similar restrictions to non-competes.

Taiwan, Republic of China

In order for an employer/employee non-competition agreement or provision to be valid and enforceable, the following requirements must be met:

  • There are special interests of the employer that deserve protection The employee must occupy a certain level of position in the company
  • The restrictions on the new employment, with respect to the employee, duration, geographical area and professional activities, should be reasonable
  • A competitive action by the employee would be a violation of trust and faithfulness to the employer
  • Employees must be compensated for loss from the non-competition obligation, separate from salary received from employment, and
  • The amount of any penalty must be reasonable.

Non-competes

Permissible for restraint periods of up to 24 months.

Customer non-solicits

Permissible for restraint periods of up to 24 months.

Employee non-solicits

Permissible for restraint periods of up to 24 months.

Thailand

Those that protect the employer's legitimate business interests may be enforced to the extent that they are reasonable and fair to the parties.

Non-competes

A non-competition agreement is permissible to the extent that it is reasonable and fair to the parties. Generally, the restriction period of not more than 2 years within a restricted area, such as Thailand, is acceptable.

Customer non-solicits

A non-solicitation agreement is permissible to the extent that it is reasonable and fair to the parties. Generally, the restriction period of not more than 2 years within a restricted area, such as Thailand, is acceptable.

Employee non-solicits

A non-solicitation agreement is permissible to the extent that it is reasonable and fair to the parties. Generally, the restriction period of not more than 2 years within a restricted area, such as Thailand, is acceptable.

Tunisia

The following restrictions are allowed:

Non-competition; non-dealing; non-solicitation of clients; non-solicitation of employees; non-employment of employees; protection of confidential information during / post-employment.

The law does not regulate the duration of restraints except for non-competition clauses in certain sectors (electricity and electronics) which is limited to 2 years and within a radius of 100 km from the head office etc. In practice, it is generally applied for a period of 2 years. However, it is important that these restrictions are reasonable and justified.

Non-competes

Permissible.

Customer non-solicits

Permissible.

Employee non-solicits

Permissible.

Turkey

Written form is a condition for the validity of a non-compete agreement. Non-competes are valid only if the employee is employed in a position whereby they have the opportunity to acquire valuable knowledge or trade secrets and the use of such information may harm the employer.

Non-competes

Non-compete undertakings:

  • Must be limited to a certain period of time (ie, maximum 2 years)
  • Must be effective within a specified territory
  • Must be in relation to a specific business field

Limitation is not regulated under the law and must be determined according to the particular case. However, based on Court of Appeal decisions, it is not possible to stipulate the non-compete territory as "all over the world" or "Turkey as a whole."

For example, "within the provinces in Turkey that the company operates" is a valid territory for a non-compete obligation.

Customer non-solicits

Permissible.

Employee non-solicits

Permissible.

Uganda

Considered to be in restraint of trade and void. However, those restraints that protect the employer's legitimate business interests may be enforced if reasonable. They must be tailored for the specific business and the risks posed by the employee. Garden leave is common for senior employees.

Non-competes

Permissible in narrow, justifiable circumstances, if reasonable. Typically no longer than 6 months (maximum of 12 months), depending on the circumstances.

Customer non-solicits

Generally permissible. Usually 6 to 12 months. Not yet tested in this jurisdiction.

Employee non-solicits

Permissible. Usually 6 to 12 months.

Ukraine

Generally unenforceable. In practice, restrictive covenants may be included in separate (ie, non-employment) agreements with top-management-level employees.

Non-competes

Ukrainian labor laws permit employers to restrict their employees to work for specific employers or any employers during the term of employment.  Additional restrictions for the members of the executive body of limited liability and additional liability companies (eg, directors) were introduced in 2018.

For instance, the members of the executive body cannot, without a consent of general meeting or supervisory board:

1.   Carry out economic activity as a private entrepreneur in the field of the company’s activity

2.   Be a member of a general partnership or a full member of a limited partnership, which carries out activities in the field of the company’s activity, or

3.   Be a member of the executive body or supervisory board of another legal entity that carries out activities in the field of the company's activities.

Breach of these obligations by the members of the executive body shall lead to termination of employment relations.

Any other post-termination non-competition restrictions are unenforceable in Ukraine.

Customer non-solicits

Generally unenforceable.

Employee non-solicits

Generally unenforceable.

United Arab Emirates

It is permissible to include restrictive covenants in the employment contract, provided that the employee is at least 21 years of age when entering into the restrictions, the employee has become acquainted with the employer's clients or the secrets of the business and the covenants are limited in relation to their duration, geographic scope and the nature of the business to be protected.

Parties are permitted to include a liquidated damages clause in the employment contract as it is not possible to obtain an injunction onshore in the UAE, although there are rules against "exorbitant" penalties being applied in employment contracts under the Civil Code. As of March 2017, it is possible to seek a ban on the employee's residence visa if they are in breach of a restrictive covenant which would prevent them from working in the territory of UAE.

Non-competes

Typically no longer than 6 to 12 months.

Customer non-solicits

Typically no longer than 6 to 12 months.

Employee non-solicits

Permissible.

United Kingdom

Considered to be in restraint of trade and void. However, those that protect the employer's legitimate business interests may be enforced if reasonable. Must be tailored for the specific business and the risks posed by the employee. Garden leave is common for senior employees.

Non-competes

Permissible in narrow, justifiable circumstances. Typically no longer than 3 to 6 (maximum of 12) months, depending on the circumstances.

Customer non-solicits

Permissible in specific circumstances. Typically no longer than 3 to 6 (maximum of 12) months, depending on the circumstances.

Employee non-solicits

Permissible. Length of restriction will depend on the circumstances.

United States

Permissible restraints are generally governed by state law (statutory and common law) and vary significantly from state to state. In most states, post-employment restrictions that are reasonably necessary to protect employer's legitimate business interests are enforced.

Non-competes

Enforcement of non-competes varies from state to state, and states and localities continue to place limits on non-competes. Where they are permitted, restrictions lasting from 6 months to 1 year are generally deemed reasonable, and restrictions lasting more than 2 years are generally considered unreasonable (except in connection with the sale of a business). Some states and localities prohibit or otherwise strictly limit non-competes in the employment context by statute, except in certain circumstances (eg, sale of a business).

Customer non-solicits

Enforcement of customer non-solicits varies from state to state. They are generally permissible if the employee was involved with a customer and the employer aided in developing the relationship or if the employee obtained confidential information from or about the customer. Customer non-solicits are treated similarly to non-competes in most states, including that they are generally prohibited in California.

Employee non-solicits

Enforcement of employee non-solicits varies from state to state. They are generally permissible, except in California.

Venezuela

Non-competes

Non-compete and non-solicitation agreements are permissible but cannot exceed 6 months following termination of employment.

Non-compete and non-solicitation restrictions must:

  • Be set under reasonable grounds, based on the employee’s job, their relationship with clients and access to trade secrets or other confidential information.
  • Be agreed in writing.
  • Provide compensation to the employee while the restriction is in place (this is only required to enforce a non-compete provision). The amount of compensation to enforce a non-compete provision is not legally defined; therefore, it is up to the parties’ agreement.

Customer non-solicits

See under “Non-competes.”

Employee non-solicits

See under “Non-competes.”

Vietnam

Non-competes

There is no regulation of non-compete clauses in the Labor Code 2012. Article 21.2 stipulates that, when an employee performs work which is directly related to business or technological secrets, the employer has a right to obtain the employee’s written agreement to terms of confidentiality for business secrets and technology as well as on payment of compensation, an agreement that is generally enforceable during employment should the employee breach it.

Generally, non-compete provisions are permissible, but the labor authorities have taken the view that labor documents may only deal with labor matters while an employee is employed, and covenants in a labor contract that are drafted to survive termination of the labor relationship are not enforceable. It is uncertain how the courts would interpret this. Given this, it is recommended that any non-competes that are intended to survive termination of the labor relationship also be included in a separate standalone contract between the employer and employee outside the labor contract, as such agreement is treated as a civil agreement and covenants therein may survive termination of the labor relationship.

Customer non-solicits

Not regulated. Uncertain in terms of enforceability.

Employee non-solicits

Not regulated. Uncertain in terms of enforceability.