Restriction of competition

The use of restrictions of competition in employment relationships may be necessary to maintain the employer's market position and to protect the employer from competition from a former employee.

Generally, where there are no agreed restrictions on competition, the employer will be protected only by the provisions of the Danish Marketing Practices Act. In our experience the Act provides poor protection for employers against unauthorised competition from former employees and their new employers.

We advise on employee competition restrictions both during employment (the employee's duty of loyalty) and after its termination.

The assistance covers primarily the conclusion and enforcement of:

non-competition clauses (prohibition against taking up employment with or setting up a competing business)
clauses on non-solicitation of customers and suppliers (prohibition against establishing business relationships with the customers and/or suppliers of a former employer)
causes on non-solicitation of employees (clauses preventing or restricting employees from taking up employment with other employers).

We also provide advice on:

the competition restrictions implied in the provisions of the Marketing Practices Act on good marketing practices and protection of trade secrets
the event of non-compliance with any of the aforesaid clauses and/or the provisions of the Marketing Practices Act, we assist in obtaining a prohibitory injunction and in raising a claim for an agreed penalty/compensatory payment
assessing the validity and scope of specific clauses in connection with the employment of individuals bound by such clauses.