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Restrictive Covenants – key considerations for employers in Italy – November 2022

11 October 2022

Our Italian employment experts consider the importance of restrictive covenants and post-contractual restrictions in Italy.

What are the key types of restrictive covenants in your jurisdiction?

With reference to post-contractual restrictions, we can mention the non-compete agreement and the non-solicitation agreement (in terms of employees, clients and customers).

Does the employer have to pay compensation to the employee in relation to the restrictive covenants? 

Post-contractual non-compete agreements must always include compensation, to be set according to its duration at the end of the employment relationship, to the geographical limits and to its object (which activity will be prohibited to the former employee).

Non-solicitation agreements are not subject to the rule aforementioned and may be validly settled even without a specific compensation.

Are there limits to the post-employment restriction period and to the geographical area of the restrictive covenants?

Pursuant to Article 2125 of the Civil Code, the duration of the non-compete agreement must not exceed five years for executives and three years for other employees. If parties agree a longer duration, it is reduced to the extent indicated above. There are no restrictions as to geographical extensions and subject matter.

Non-solicitation agreements are not subject to statutory restrictions.

Of course, the courts verify the adequacy of the penalty provided for in the agreement in the event of a breach.

Can the employer unilaterally revoke the agreed restrictive covenant at the end of the contract or otherwise avoid its application?

No, it is not possible.

What remedies are available to the employer when an employee breaches their restrictions?

In situations where there is a breach of restrictive covenants, remedies available to the employer include penalties and restoration of damages. Moreover, it is possible to file a claim to get a restriction order, by way of injuction, before the relevant Court.

Restrictive Covenants Webinars
We will be hosting a series of restrictive covenant webinars, learn more and register here.

Further Reading