The Agreement Not To Work For Competitor is essential for German employers seeking to protect their legitimate business interests from competition by former employees. This document is typically used when employees have access to sensitive information, trade secrets, or valuable client relationships. It must strictly comply with German law requirements, particularly regarding mandatory compensation (Karenzentschädigung) of at least 50% of the last received remuneration. The agreement is commonly implemented for senior positions or roles with access to confidential information, and it should be carefully tailored to balance the employer's protection needs with the employee's constitutional right to freely choose their occupation. The maximum enforcement period is two years, and the agreement must be provided in writing before the employment relationship ends.
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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 the employee's role and access to confidential information
3. Definitions: Key terms including 'Competitive Activity', 'Restricted Period', 'Restricted Territory', and 'Confidential Information'
4. Scope of Non-Compete Obligation: Detailed description of prohibited activities and competitor definitions
5. Duration: Specification of the non-compete period (maximum 2 years under German law)
6. Geographic Scope: Definition of the territorial boundaries where the restriction applies
7. Compensation: Mandatory waiting allowance (Karenzentschädigung) of at least 50% of the last contractual remuneration
8. Payment Terms: Schedule and method of compensation payment
9. Reduction of Compensation: Conditions under which compensation may be reduced due to other earnings
10. Breach and Remedies: Consequences of violation and available legal remedies
11. Governing Law: Explicit statement of German law application
12. Severability: Provision ensuring partial validity if certain clauses are found unenforceable
1. Garden Leave: Used when the employer wishes to include provisions about paid leave during notice period
2. Customer Non-Solicitation: Added when employee had significant customer contact and relationship
3. Employee Non-Solicitation: Included when employee had management role or access to sensitive employee information
4. Return of Company Property: Added when employee had access to physical or digital company assets
5. Continuing Confidentiality Obligations: Used when additional confidentiality provisions beyond standard non-compete are needed
6. Training Cost Reimbursement: Included when employer provided significant specialized training
7. Third Party Rights: Added when affiliates or related companies need protection under the agreement
1. Schedule 1: Compensation Calculation: Detailed breakdown of the compensation calculation including base salary, bonuses, and benefits
2. Schedule 2: List of Competitors: Specific companies or types of businesses considered competitors
3. Schedule 3: Restricted Territory: Detailed geographic description or map of restricted area
4. Appendix A: Employee's Position and Duties: Detailed description of employee's role and responsibilities relevant to the non-compete
5. Appendix B: Confidential Information: Specific categories of confidential information the employee had access to
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