This brief contribution contains a number of key aspects that should be taken into account with regard to non-competition clauses and notes some differences between this non-competition clause and other similar clauses that are generally contained in employment contracts. Under Spanish law, workers are legally bound by a non-competition clause during their employment relationship. In other words, if the employer does not allow it, workers may not engage in a professional or professional activity in competition with the activity of their employer. The agreement shall be concluded in writing. As regards the first requirement, Spanish case-law has held that an agreement which depends solely on the will of the undertaking is null and void, since the effectiveness of the agreement is left to the discretion of a single party, which is contrary to Article 1256 of the Spanish Civil Code (Código Civil). Therefore, any clause stipulating that the pact could be revoked unilaterally is null and void. Payment of compensation can be made either during the duration of the employment relationship or after its termination – in order to strengthen the application of the post-contractual non-competition clause, the best option is to make the payment after the end of the employment relationship. The payment usually consists of a percentage of the worker`s salary and, although the law does not provide for a directive on ”fair remuneration”, it would be, according to case law, about 50 to 60% of the worker`s gross annual salary. If the compensation is not considered appropriate, the non-competition clause would not apply. In accordance with Spanish law, the non-competition clause agreed between the parties would be valid even if the termination of the employment relationship is not justified, unless otherwise agreed.
If nothing concrete has been agreed on this subject, the non-competition clause would apply regardless of the reason for dismissal (fair dismissal, unfair dismissal, voluntary resignation, retirement, etc.). The length of time a worker has a normal salary and is bound by his or her employment contract, while being asked by the employer not to be in the office or to contact clients or clients, is usually only used for disciplinary proceedings during the investigation. The employer may not place the worker on garden leave, unless expressly stated in the employment contract, which is not provided for by law. For this reason, they can only be agreed by mutual agreement within the framework of the employment contract. The validity of the post-contractual non-competition clause depends on compliance with the following requirements and we dwell below on the first three: in Spain, it is customary to introduce penalty clauses in post-contractual non-competition clauses in the event of a breach of the non-competition clause by the worker. . . .