Investigations for Non-Compete Agreement Violations
The non-compete agreement is aimed at restricting the activities of an employee for the period following the termination of the employment relationship. In brief, it is a contractual clause through which the employer agrees with the former employee to limit the latter’s professional activity once the employment relationship has ended.
Article 2125 of the Italian Civil Code sets precise limits in this regard, establishing that such an agreement must be in writing and have predetermined time limits: 5 years for executives and 3 years for all other workers. The same article also sets other limits (regarding place and subject matter) and provides for the payment of compensation to the employee, proportional to the duration of the non-compete obligation. This compensation is of an obligational nature, as it constitutes payment for a “non-doing,” granted in view of the termination of the employment relationship.
The rationale behind the non-compete agreement is that the employee, upon expiry of the contractual time limits, might engage in unfair competition that could be harmful to the company where they worked, having acquired knowledge of its operational methods and production techniques. The purpose of the law is therefore to allow the employer to protect themselves for the period following the end of the employment relationship against the former employee joining a competing company. Through this agreement, the former employee (or former collaborator) is limited in their ability to engage in competing activities with the company for a certain period and within a specified geographic area after the termination of employment.
The Italian Supreme Court, with ordinance no. 9790 dated May 26, 2020, affirmed that the non-compete agreement under article 2125 c.c. can cover any work activity that may compete with that of the employer and does not have to be limited to the tasks performed by the employee during the employment.
In particular, economic activities to be considered in competition must be identified with reference to each market in its objective structures, where demands and supplies of identical or mutually alternative and interchangeable goods or services converge.
However, according to the Court, the non-compete agreement must be considered null whenever its breadth is such as to suppress the practical professional activity of the worker, compromising all their earning potential.
Similarly, the non-compete agreement must be considered null if it provides for symbolic compensation, manifestly unfair or disproportionate in relation to the sacrifice required from the worker and the reduction of their earning possibilities.
This agreement differs from the non-competition obligation, which is a contractual duty during the employment relationship (i.e., during the course of employment) and requires no specific agreement, as it is part of the broader duty of loyalty established by article 2105 of the Civil Code.
Furthermore, the Civil Code also provides for a non-compete agreement, beyond that between former employer and former collaborator, between entrepreneurs operating in the same market sector. Article 2596 c.c. provides a contractual limit to competition between companies, consisting of an agreement between two or more entrepreneurs to prevent the exercise of certain competitive activities for a limited period (5 years). This has effect only between the parties and within a certain area and must be proven in writing.
Failure by the former employee to respect the non-compete agreement therefore constitutes a contractual breach. The former employer can take legal action against the former employee to obtain compensation for damages caused by the violation.
By law, the burden of proof lies with the employer, who can rely on private investigators and/or authorized investigative agencies to gather all necessary evidence to demonstrate the breach of the non-compete agreement in Italy. The investigative activity entrusted to an authorized agency will focus on collecting evidence to identify the wrongdoing committed by the former employee and to prevent the continuation of harmful and unfair behavior against the company. At the conclusion of the investigation, the private investigator will provide a detailed investigative report supported by evidentiary materials (photographs, videos, audio files, documents, and possibly testimonies), which will have full legal validity.
In conclusion, contacting the Argo investigative agency in Rome means turning to an expert professional with a team of qualified private investigators capable of detecting and documenting all activities that constitute a violation of the non-compete agreement by a former partner, employee, agent, or collaborator against the company, in order to obtain proof that clearly demonstrates the breach of the non-compete agreement.