Employee non-solicitation clauses: non-compete clauses or not?

Employee non-solicitation clauses are intended to prevent former employees, after leaving the company, from working with employees of their former employer or from poaching them. Until now, it had been disputed whether such clauses are subject to the strict statutory requirements applicable to non-compete clauses (Section 36 AngG, Section 2c AVRAG).

The Austrian Supreme Court (OGH) has now clarified that the decisive factor is not the title of the clause but its actual content. If, in a specific case, the clause constitutes a restriction on professional activity that qualifies as a “limitation” within the meaning of Section 36 AngG, an employee non-solicitation clause must be treated as a non-compete clause (9 ObA 6/26m). In such cases, the statutory validity requirements for non-compete clauses must also be observed.

In the case at hand, the clause was drafted particularly broadly. It applied not only to employees of the employer but also to employees of affiliated companies. Furthermore, it prohibited approaching these individuals for business development purposes not only by the employee personally, but also made the employee liable, irrespective of fault, if their new employer merely contacted the protected employees. The OGH concluded that this amounted to a significant restriction on the employee’s ability to work within the industry and therefore qualified as a non-compete clause within the meaning of Section 36 AngG. However, as the employee’s most recent remuneration fell below the relevant statutory threshold, the clause was held to be entirely unenforceable due to its non-compliance with Section 36(2) AngG.

This decision once again highlights that post-contractual restrictions should not be included in employment contracts as a matter of routine. Standard clauses with the maximum permissible duration, a broad geographical scope or far-reaching activity restrictions are often difficult to enforce in practice. A more effective approach is to draft provisions that are carefully tailored to the specific company, industry, and the employee’s role. Particularly for key positions, the duration, territorial scope, and substantive restrictions should be defined as clearly as possible.

The inclusion of a contractual penalty clause should also be considered carefully. Where such a penalty is agreed, the employer may only claim payment of the penalty and cannot additionally demand compliance with the post-contractual obligations themselves.

We would be pleased to assist you in drafting effective and practical post-contractual restrictions that are tailored to your business needs.