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C as in Competition
Am I allowed to work for another company in parallel with my employment?
Employees may not compete with their employer during the period of their employment under german employment law. If you earn your living as an employee, you may not interfere with the economic opportunities of your employer. This rule applies even if there is no non-competition-clause expressly stipulated in your employment contract. This is regulated by law only for commercial agents, but it is generally accepted that this also applies to all other employees.
The non-competition obligation is violated if the employee uses his or her knowledge and skills for the benefit of a competitor of the employer. However, the competitive activity may be permissible under certain conditions: If the employer has no legitimate interest in the employee refraining from the competitive activity, for example because the activity does not affect the employer’s position. This applies in particular to part-time employees who work for several employers. Here, too, it always depends on the individual case. In any case, it is not permissible to use the employer’s contacts, for example, to poach customers or colleagues.
Can my employer prohibit me from transferring to competition?
Generally, the non-competition obligation ends with the termination of the employment relationship. A non-competition clause can only be maintained beyond the termination of the employment relationship by means of a separate agreement.
These non-competition clauses are subject to strict conditions. It is only effective if the employer pays a compensation for non-competition. The compensation must amount to at least half of the last monthly salary for the duration of the non-competition clause. A non-competition clause may be agreed for a maximum of two years after the end of the employment contract. The non-competition agreement is also subject to special formal requirements: The non-competition agreement must be signed on paper by both the employee and the employer.
Please note: This is a very general overview on german labor law. If you need help in your particular case, please do not hestitate to contact me or book your appointment. I’m happy to help.
