Non-competition of a former employee – Know-how is part of the company’s assets and, in a globalized economy, intellectual property is one of its most important assets. Therefore, given that directors and managers have access to confidential and privileged information, upon the termination of the breakup of their employment contract, there is an interest of the company in maintaining confidentiality and in the former employee not taking the acquired know-how to the competition.
On the other hand, the reinsertion of the former director or former manager into the labor market depends on the prior experience and the know-how acquired over the years.
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In the area of Labor Law, this issue has been the subject of discussions. And the position of the Superior Labor Court (TST) requires caution in the structuring of the employment contract in order to avoid the declaration of nullity of confidentiality and non-competition clauses and so that there are no barriers to the former director’s or former manager’s return to the labor market.
TST annuls confidentiality and non-competition agreement
The TST[1], in analyzing the case of a former technical manager, understood that the “Confidentiality and Non-Competition Stipulation Agreement” should be annulled, mainly because the restriction signaled that the professional could not dedicate himself to the “exploitation of an activity connected to the same segment in Brazil or abroad as the former employer”.
And, therefore, the prohibition, for a period of 24 months, on the exercise of work connected to the economic activity of the company after his departure constitutes a severe restriction on a classic fundamental right provided for in Article 5, item XIII of the Federal Constitution, insofar as it restricts his work and free professional development.
In another judgment[2], concerning a former technology and services director who, two months after being hired, signed a “Confidentiality Agreement”, the TST understood that even if the former employee held the status of a high-ranking employee, such a situation did not remove his condition of hyposufficiency, since the confidentiality and non-competition clause was not defined at the time of hiring as a condition for admission to the director position and, therefore, decided that the alteration was prejudicial to the working conditions and annulled the confidentiality and non-competition agreement.
That is, the understanding was that the alteration of the employment contract was unilateral, applying the principle of the unalterability of the employment contract.
In another judgment[3], the “Term of Commitment, Secrecy and Confidentiality” that imposed on the former employee the duty of secrecy for 10 years over “all technical information obtained through the employment contract relating to design, creation, specification, operation, client portfolio, organization” was declared null on the understanding that the clause prohibits the free exercise of any work by the former employee.
There are judgments that understand that if there is consideration from the employer, the confidentiality and non-competition agreement is valid. In analyzing the case of a former vice-president of specialized businesses[4] who signed a “Private Instrument of Termination of the Employment Contract and Discharge of the Confidentiality and Non-Competition Agreement” in exchange for remuneration paid by the employer after the termination of the employment contract, it understood that the former employee could not be considered an ordinary worker, taking into account the high value of the last salary received, the value of the termination and the value of the agreed indemnification.
It is concluded from the analyzed TST judgments that the contractual clauses that restrict the protection against the transfer of the company’s confidential data are considered valid, being compatible with the duty of fidelity, which derives from the principles of probity and good faith, arising from the employment contract, without making it impossible for the former employee to exercise the right of the former employee to perform any work connected to the economic activity of the company after his departure.
On the other hand, it is concluded from the analyzed TST judgments that confidentiality and non-competition clauses constitute a restriction on the freedom of work and, therefore, must satisfy a legitimate interest of the employer, that is, that the former employee’s knowledge be so relevant that it could cause appreciable harm to the employer.
And, in this context, for the clauses to be valid it is recommended that there be territorial limitation, temporal limitation, the existence of consideration to the former employee and a guarantee that the employee can develop another labor activity.
[1] RR-278-80.2010.5.04.0303
[2] RR-1948-28.2010.5.02.0007
[3] RR-1066-03.2014.5.12.0022
[4] Eg-ED-AIRR-1135-07.2014.5.02.0089
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