Transfer of workplace and non-competition agreement

Publication / 28.11.2016

The Regional Court in P. VI Labor Department, pursuant to Article 390 § 1 of the Code of Civil Procedure, presented to the Supreme Court a legal issue presented in the form of a question with the following content: “In the event of the transfer of a workplace or part thereof to another employer, does the latter become by virtue of law (Article 231 of the Labor Code) a party to the non-competition agreement after the termination of the employment relationship (Article 1011 § 1 of the Labor Code), which was concluded with the previous employer.”

The Supreme Court stated that Article 231 § 1 of the Labor Code does not apply to a non-competition agreement after termination of the employment relationship (Article 1012 § 1 of the Labor Code), which was concluded with a previous employer.
In the opinion of the Supreme Court, a non-competition agreement after the termination of the employment relationship does not supplement the content of the employment contract, and it is not possible to assume that Article 231 of the Labor Code applies to this agreement. This is because the effect of the transition from Article 231 of the Labor Code does not extend to rights and obligations arising from legal relationships other than the employment relationship, even if they are related to it. It is not permissible to broaden the interpretation of Article 231 § 1 of the Labor Code. It is rational to assume that it is the new employer who should decide to bind the transferred employee to the non-competition clause after the termination of the employment relationship. Since the reasons that decided to conclude it with the previous employer may not be of any importance to the new one.