Non-compete clause addendum to an employment contract (Romania)

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The addendum with a non-compete clause that applies after the employment contract ends, with every element without which the clause has no effect (art. 21 of the Romanian Labour Code): the activities barred, the third parties, the area, the length — 2 years at most — and the monthly indemnity of at least 50% of the average gross pay of the last 6 months.

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Common questions

What must a Romanian non-compete clause contain to be valid?

The activities barred, the third parties they are barred in favour of, the geographical area, the length and the amount of the monthly indemnity (art. 21 of the Labour Code). If any one of them is missing, the clause has no effect, however clear the rest of it is.

How much must the non-compete indemnity be?

At least 50% of the employee's average gross pay over the 6 months before the contract ended (art. 21), paid monthly for the whole ban, which cannot exceed 2 years (art. 22). Without the indemnity being paid, the former employee is not bound by the ban.

What if the former employee breaks the non-compete?

They can be ordered to return the indemnity received and, where appropriate, to pay damages for the loss caused to the employer (art. 24 of the Labour Code). A court may, however, reduce the clause's effect if it absolutely prevents them from practising their profession (art. 23).