The Active Non-Compete Agreement is a crucial document for businesses operating in Germany who need to protect their legitimate business interests from competition by former employees. This agreement is specifically designed to comply with strict German labor law requirements, which mandate minimum compensation of 50% of the employee's last remuneration during the restricted period. The document is typically used when employees have access to sensitive information, important customer relationships, or specialized knowledge that could be detrimental to the employer if used by a competitor. It includes specific provisions about the scope of restrictions, compensation details, notification requirements, and enforcement mechanisms, all while ensuring compliance with German statutory requirements and case law. The agreement must be provided to the employee before employment begins or during employment for future effect, and must be executed in written form to be valid under German law.
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1. Parties: Identification of the employer and employee, including full legal names and addresses
2. Background: Context of the agreement, including employee's role and access to confidential information
3. Definitions: Key terms including 'Competitive Activity', 'Restricted Territory', 'Confidential Information', and 'Business Relationships'
4. Duration of Non-Compete: Specification of the non-compete period (maximum 2 years under German law)
5. Scope of Restrictions: Detailed description of prohibited activities and geographical limitations
6. Compensation: Mandatory compensation details (minimum 50% of last total remuneration) during the non-compete period
7. Payment Terms: Specifics about how and when the compensation will be paid
8. Reduction of Compensation: Conditions under which compensation may be reduced due to other employment earnings
9. Exceptions and Permitted Activities: Activities that are explicitly allowed during the restriction period
10. Notification Requirements: Employee's obligations to inform about new employment during the restricted period
11. Breach and Remedies: Consequences of violating the agreement and available legal remedies
12. Governing Law: Confirmation of German law application and jurisdiction
1. Garden Leave: Optional provisions for garden leave period before non-compete begins, used when immediate separation is desired
2. Training Costs: Provisions regarding repayment of training costs, if applicable
3. International Scope: Additional provisions for international restrictions, used when business operates across borders
4. Customer Protection: Specific provisions about customer non-solicitation, used when employee had significant customer contact
5. Employee Non-Solicitation: Provisions preventing recruitment of other employees, if relevant to role
6. Severability: Clause ensuring partial validity if certain provisions are found unenforceable, recommended for complex agreements
1. Schedule 1 - Restricted Territory: Detailed map or list of geographical areas covered by restrictions
2. Schedule 2 - Compensation Calculation: Detailed breakdown of compensation calculation including base salary, bonuses, and benefits
3. Schedule 3 - Competitors List: Non-exhaustive list of main competitors covered by the agreement
4. Appendix A - Employee's Current Role and Responsibilities: Detailed description of current position to help define scope of restrictions
5. Appendix B - Confidential Information Categories: Detailed list of types of confidential information employee has access to
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