As a result of the evolution of the market, the exponential increase in companies in various areas and the specialties inherent in their object, it is common to see in employment contracts the so-called "Exclusivity Clause" or "Non-Competition Pact", imposing an obligation on the employee not to carry out a certain activity for a certain period of time, as if, in itself, this were capable of producing effects.
In fact, despite the proliferation of such clauses in contracts, it is necessary to ascertain the validity and practical effectiveness of such clauses.
Now,
Under the Employment Contract Law (Law no. 7/2009, of February 12), Article 136(2) states that
"It is lawful to limit the employee's activity during the maximum period of two years following the termination of the employment contract, under the following conditions:
a) It is contained in a written agreement, namely an employment contract or its revocation;
b) It is an activity whose exercise may cause damage to the employer;
c) The employee is entitled to compensation during the period of limitation of activity, which may be reduced equitably when the employer has incurred significant expenses in professional training."
In other words, there are three general requirements for admitting the validity of such a limitation on contractual freedom, namely: it must be set out in a written document (employment contract, addendum, or even in a revocation agreement); it must relate to activities in which the exercise may cause harm to the employer (in the context of so-called "differential competition"); and it must provide adequate compensation for the purpose.
All of this, so as not to be too arbitrary, not to limit the worker in too onerous a way, and to presuppose adequate and proportional compensation in view of any damage caused by the limitation on freedom of work thus imposed, within the scope of contractual freedom and autonomy of will.
This is because, as has been understood by the Higher Courts and the majority of Doctrine, this clause has a signaling and onerous nature - since it generates an obligation not to perform and, in return, a compensatory obligation.
This compensation does not have to be determined in advance, but it does have to be at least ascertainable in an objective, fair and adequate manner.
If the employment relationship presupposes a special relationship of trust or specific and sensitive knowledge in the field of commercial competition, the duration may be extended to three years (see Article 136(5) of Law 7/2009 of February 12).
On the other hand, although it is not expressly stated in the law, it has been accepted that, depending on the specific employment relationship in question and its purpose, the validity of such a limitation may be dependent on (or apply in practice to) a specific geographical area.
If all the legal requirements for the admissibility of the non-competition pact are not met, with the possible exclusion of the time limitation, to which the legal limitation may be subsidiarily applicable (2 years as a rule), the consequence will be the nullity of the respective clause/pact, with the employee's non-compliance having no practical effect.
It should be emphasized that the matter underlying non-competition clauses is quite peculiar, so its assessment always depends on an analysis of the specific case.
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Two specific cases:
a)
Within the scope of the sports contract (Law no. 54/2017, of July 14), Article 19(1) states that "Clauses inserted in a sports employment contract which seek to condition or limit the freedom of work of the sportsperson after the end of the contractual relationship are null and void".
Thus, in the context of the legal-labor relations to which the aforementioned Law applies, any limitation on the freedom to work after the end of the employment contract, i.e. non-competition agreements, is expressly prohibited.
b)
In the context of employment contracts for entertainment professionals (Law no. 4/2008, of February 7), Article 11(5) allows for exclusivity to be established in the employment relationship, provided that the parties establish this in writing, and "by setting adequate compensation".
Otherwise, "workers in the performing and audiovisual arts may enter into simultaneous contracts with more than one employer, provided that the fulfillment of the purpose of the different contracts is not incompatible for reasons of working hours, geographical location, professional or otherwise." (cfr. no. 6 of the aforementioned art. 11).
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