Clauses in an employment contract
The clauses common in IT: non-competition, confidentiality, exclusivity, mobility, training repayment and ownership of creations, with their conditions of validity and what happens to an invalid clause.
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Non-compete clause: what is it?
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A clause that forbids the employee, once the contract has ended, from carrying on an activity that competes with the former employer.
It restricts the freedom to work: it is valid only if it is essential to the company's legitimate interests, limited in time and space, suited to the job, and backed by financial compensation.
A developer is bound by a one-year non-compete clause, limited to the Paris region, with no financial compensation at all. What is it worth?
- It is void, for lack of financial compensation
- It is valid: it is limited in time and space
- It is valid, the employee being able to claim the compensation
- The judge cuts it back to six months
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It is void, for lack of financial compensation
Financial compensation is a condition of validity, like the limits of time and space: without it the clause is void and the employee is free to join a competitor.
A non-compete clause must be limited in … and in …, and provide for ….
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A non-compete clause must be limited in time and in space, and provide for financial compensation.
It must also be essential to the company's legitimate interests and take account of the specifics of the job. If one condition is missing, the compensation for example, the clause is void.
Exclusivity clause: what is it?
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A clause by which the employee agrees not to work for another employer or carry on another professional activity while under the contract.
It is valid only if it is essential to protect the company's interests and proportionate to the task entrusted. A blanket ban is disproportionate.
A full-time developer sells an app in the evenings that has nothing to do with her employer, despite a general exclusivity clause. What is the clause worth, and what remains forbidden?
- The clause is disproportionate; but loyalty still forbids competing with the employer
- The clause is valid: any side activity is forbidden
- The clause is void; and no duty of loyalty remains
- The clause is valid only if the app is free
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The clause is disproportionate; but loyalty still forbids competing with the employer
A general ban on any other activity is not justified by the task entrusted: it is disproportionate. The duty of loyalty remains: the app must not compete with the employer or use its resources.