JŠK Legal Flash
The Constitutional Court restored meaning to the non-compete clause
The Constitutional Court recently dealt with the conditions for the entitlement to payment of a contractual penalty when a former employee breaches a non-compete clause. Contrary to the interpretation of the Supreme Court, the Constitutional Court concluded that the employer was entitled to payment of a contractual penalty irrespective of how long the breach of the non-compete clause (i.e. a performance of gainful activity identical with the employer's business activity) lasted. It also has no bearing whether the employee actually misuses protected information. The amount of the contractual penalty may only be moderated if the mutual rights and obligations agreed upon in the non-compete clause are disproportionate.
(Judgment of the Constitutional Court II. ÚS 3101/18 of 2 May 2019)