Post-contractual non-compete: entitlement to compensation for abstention

A post-contractual non-compete clause can prevent you for up to two years from going to the competition or becoming self-employed. This is only permissible if the employer pays you compensation for abstention for it, at least half of your most recently received benefits.

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If a post-contractual non-compete clause binds you, you are entitled to compensation for abstention of at least 50 % of your most recently received contractual benefits (§ 74 HGB).

If the promise of compensation is missing, the non-compete clause is generally non-binding; you can decide whether or not to abide by it.

What you should do now

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1. Check the clause
Read the non-compete clause: duration (max. 2 years), scope and whether compensation for abstention is promised.
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2. Clarify the binding effect
Without promised compensation the clause is usually non-binding. With a promise you must abide by it and receive the compensation.
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3. Calculate the compensation
Determine 50 % of your most recently received benefits (including variable shares) per month of the abstention period.
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4. Demand payment
Demand the monthly compensation for abstention in writing. Crediting of other earnings is only permissible within limits.

How to spot the scam

The clause binds you, but no compensation is provided for.
The scope is extremely broad (an entire industry, an entire country).
The employer does not pay out the compensation for abstention.

Frequently asked questions

How high is the compensation for abstention?

At least half (50 %) of your most recently received contractual benefits, paid for each month of the non-compete clause (§ 74 HGB). Variable remuneration is to be included proportionally.

Does the clause apply even without compensation?

As a rule not binding. If no compensation for abstention is promised, you can usually decide freely whether to observe the clause. Have the specific clause checked.

How long may a non-compete clause last?

At most two years after the end of the employment relationship. Longer or unreasonably broad clauses are wholly or partly invalid.

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General information for self-help, not legal advice (RDG). In case of a high loss or uncertainty: contact a consumer advice center or a lawyer.