COVENANT IN RESTRAINT OF COMPETITION
|COVENANT IN RESTRAINT OF COMPETITION
Term used to denote an agreement which restricts the employee's economic activity after the employment relationship has ended.
Under Austrian law, such an agreement is valid only in so far as the restriction applies to activity in the employer's own sphere of business activity, covers a period of not more than a year and does not constitute a threat to the former employee's livelihood which is unreasonable in substantive, temporal or geographical terms or as compared with the employer's business interests.
In cases of dismissal not justified by culpable conduct on the part of the employee (see protection against dismissal), employers lose the right to invoke a covenant in restraint of competition unless they declare that the former employees concerned will continue to receive their last level of pay for the whole of the period of restriction. See also restraint on competition.))