Post-Contractual Non-Compete Clause: Compensation and Validity
A post-contractual non-compete clause binds you only if it provides for adequate compensation for the non-compete period and complies with the statutory requirements. Otherwise it is void or non-binding for you.
What is a post-contractual non-compete clause?
A clause that, for a defined period after the end of the employment relationship, prohibits you from working for a competitor or founding a competing business. Such clauses are governed by §§ 74 ff. HGB.
Compensation is mandatory
The clause is binding only if, for its duration, the employer promises compensation amounting to at least half of the most recently received contractual benefits. If this promise is missing, the clause is non-binding for you – you may then choose whether to abide by it.
Maximum duration and scope
The non-compete clause may last no longer than two years from the end of the contract. It must serve to protect a legitimate business interest of the employer, and it must not unreasonably impede your professional advancement in terms of place, time, and subject matter.
Form and consequences of defects
The clause requires the written form; the signed document must be handed over to you. If the compensation is entirely absent, the clause is non-binding; if it violates mandatory requirements, it can be void. Any income earned elsewhere is set off against the compensation within the statutory limits.
How to review the clause
Check the following: Is compensation of at least 50 % promised? Does the duration stay within a maximum of two years? Is the clause limited in subject matter and place? Was the written form observed? An automated contract review detects missing or insufficient compensation.
Relevant law
Frequently asked questions
Yes. Without a promised compensation amounting to at least half of the most recently received benefits, the post-contractual non-compete clause is non-binding for you.
At least half (50 %) of the most recently received contractual benefits, paid for the entire duration of the clause.
No longer than two years from the end of the employment relationship.
If the compensation is missing, you may choose: abide by the clause and demand the compensation – or disregard it and work for a competitor.
In part, yes: income earned elsewhere is set off against the compensation to the extent that, together with the compensation, it exceeds a certain proportion of your former earnings.
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General legal information based on your contract — not individual legal advice.