Non-Compete Clauses in Norwegian Employment Contracts: Key Considerations
Explore the new regulations on non-compete clauses in Norwegian employment contracts under the Working Environment Act. Delve into the interests of employers, society, and labor mobility, alongside the balancing of interests in each case. Discover the specifics of Avtl. 38 and Aml. Ch. 14, including the need for protection against competition and compensation details.
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Presentation Transcript
Non-competiton clauses in employment contracts under Norwegian law Harald Irgens-Jensen, University of Oslo
New rules in the Working Enviornment Act ( arbeidsmilj loven ) Chapter 14 A Enacted 18 Dec 2015 Amending the former regulation of non-compete clauses in Sec 38 of the 1918 Agreements Act ( avtaleloven ) Explicit regulation of non- solicit and non- recruitment clauses
Considerations The interest of the employer in preserving a competitive advantage (especially in relation to trade secrets and know how) Interest of society in securing investments in innovation The need for labour mobility (for both individual and society) More predictable than the old 38 Prevent that non compete-clauses become standard Dominique Doncre: Idleness (1818)
Avtl. 38 v. aml. Ch. 14 A key issues Avtl. 38 forpliktelsen [er] ikke bindende i den utstrekning den urimelig innskrenker vedkommendes adgang til erverv eller m anses for strekke seg lenger enn n dvendig for verne mot konkurranse A balancing of interests in each case No explicit time limitation Compensation not mandatory Aml. Ch. 14 A a specific need ( s rlig behov ) for protection against competition (in particular protection of trade secrets and knowhow) In writing Max one year after end of employment Employer must provide a written statement as to if and to what extent the non compete clause will be invoked Compensation 100% of salary
Instead of, or in addition to, the non-compete clauses, an employer may rely on the legal trade secret protection Penalty Code Section 207 (and 208) Marketing Act Section 28 and 29 Supplemented by general clause in Section 25 Foto: Forensicon
and how predictable is that? sum of experiences from trial and error over the years = trade secret? (Gulating Court of Appeal 15 March 2015 (LG-2013-162132) and 4 August 2015 (LG- 2013-162132)
Expanding the trade secret protection by contract Instead of saying Employee hereby agrees not to directly or indirectly compete , may the employer write . Employee hereby agrees not to use any knowhow acquired during his employment ..not to disclose or use any business related information ..the employer will own all methods and ideas ??
Proposed EU Directive Article 1.3: this Directive shall not offer any ground for: a) limiting employees use of information that does not constitute a trade secret as defined in point (1) of Article 2: b) limiting employees use of experience and skills honestly acquired in the normal course of their employment; c) imposing any additional restrictions on employees in their employment contracts other than restrictions imposed in accordance with Union or national law Rec 39: This Directive should not affect the application the law of contract .
