Restrictive clauses in employment agreements may bind employees with their employer even after their employment has been terminated. Normally agreed upon commencement of the employment, such clauses may restrict the employee to exercise trade or profession competing with the employer (non-compete clause), from disclosing any confidential information or trade secrets relating to the employer’s business to third parties (non-disclosure clause) or from soliciting clients or staff of the former employer (non-solicitation clause).
The application of these restriction by the employer are limited to where reasonably necessary for the protection of the employer’s business. Legitimate interests in respect of which an employer is entitled to exercise such protection against the employees include (i) trade secrets and confidential information; (ii) existing customer and connections; (iii) working for competitors and (iv) enticing existing employees.
The law in Malta does not regulate restrictive covenants in employment contracts. Maltese courts have however set several limitations on the validity and enforceability of restrictive covenants in employment contracts.
According to Maltese case law, clauses in restraint of trade must be interpreted as restrictively as possible. The Maltese Courts follow that such restrictive clauses are valid and enforceable when the employer can prove that legitimate interest in imposing such clause and the clause is reasonable within the relevant context. In contrast, the Courts have held that, generic and ambiguous restrictive clauses being all-encompassing and preventing the employee’s exercise of his trade or profession in any manner following termination of employment, albeit for a limited period, to be void and not enforceable since they may be tantamount to stifling the employee’s right to work.
A non-solicitation covenant can restrict the right to solicit or attempt to entice away former customers, or to have post-employment dealing with such customers, but such clauses should be limited to those customers with whom the ex-employee had some dealings for otherwise the restrain is likely to be viewed as one designed to prevent competition. In such cases the position of the employee, the effective period of services and the employer’s nature of business may be relevant.
Restrictive clauses can be enforced only if they are in writing. Restrictive covenants are to be reasonable, without exceeding what is genuinely necessary in order to protect an employer’s interest. These clauses are to be reasonable in relation to the subject-matter, time and place in which it operates.
The law surrounding post termination restrictions is complex and constantly evolving. It is crucial that you get expert advice about post-termination restrictions and how they affect you and your business.
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Mariella graduated from the University of Malta with a doctorate in law in 2005. She completed a master’s degree in ‘European Private Law’ from the La Sapienza, University of Rome, and was admitted to the bar in Malta in 2006.
Mariella is a people person – and it is this attribute which has really characterised and shaped her career.
Over the years, she headed the legal departments of several corporate services firms. Due to her skillset, she was also entrusted with managing and overseeing operations and human resources, where she gained technical and practical experience in various corporate, commercial and employment matters.
Her practical hands-on experience and insight perfectly complement Mariella’s technical knowledge of employment law, thus placing her in an ideal position to understand and advise employers and employees alike on various matters that may arise at the workplace.
Mariella is passionate about employment law matters and provides her clients with the highest-quality legal service to achieve the best possible outcome and resolve any employment law related issues and concerns.
Bradley graduated Doctor of Laws from the University of Malta in 2005 and was admitted to the Bar in Malta in 2006. He advises clients on various corporate, commercial, employment and regulatory matters, with particular focus on company and financial services law.
He has assisted clients in various corporate and commercial matters by providing company law advice and assisting in the implementation of corporate finance, restructuring, mergers and acquisitions and similar transactions.
Bradley has also advised and assisted investment funds, fund managers and other investment services providers, banks and financial institutions, on various legal and regulatory matters relating to the setting up, authorisation and ongoing conduct of their activities in Malta.
His practice also covers general employment law matters. Bradley’s experience in company and financial services law enables him to focus on various corporate and regulatory aspects of employment relationships. In particular, he advises organisations on the implementation of employee share option and participation schemes, the implications of business transfers on employment relationships, as well as relations with senior employees.
Karl graduated Doctor of Laws from the University of Malta in 2005 and was admitted to the Bar in Malta in 2006.
Karl has gained considerable expertise in technology law and regularly assists clients in relation to intellectual property issues, commercial contracts and ways to ensure compliance with the General Data Protection Regulation (GDPR) and privacy laws. Whilst such matters used to be only given incidental importance when dealing with employment matters, they are now widely acknowledged to be vital in all employment relationships.
He is also regularly engaged by C-level executives to assist in negotiating employment contracts and settlement agreements.
Karl advises across a multitude of industries including technology; marketing; adtech; financial services; gaming; esports; consumer products; and media and telecommunications.