ITALY Law and Practice Contributed by: Angelo Zambelli, Barbara Grasselli and Alberto Testi, Zambelli & Partners
“duty of loyalty” effective as long as the employment relationship exists. According to case law, this duty of loyalty prevents the employee from disclosing or communicating to a third party any confidential infor - mation or trade secrets relating to the business of the enterprise, which may have come to their knowledge during the employment relationship. Therefore, the confidentiality obligation automatically follows the employment relationship, and it is not necessary to insert a specific clause which provides such an obliga - tion in the employment contract or subsequent agree - ments. Disciplinary sanctions (including dismissal) may be applied if the above duties are violated. In addition, an employer may be able to obtain some relief against an employee who has improperly dis - closed or used his employer’s or ex-employer’s con - fidential information or trade secrets. Such activity by the employee might be considered a criminal offence under Article 623 of the Italian Criminal Code. Furthermore, the behaviour of the employee after the termination might be considered to be “unfair com - petition” pursuant to Article 2598 of the Italian Civil Code (eg, an employee setting up a new company using the confidential information obtained through its previous employer). In this case, the employer can ask the court to issue an injunction to stop the activity in competition. In addition, an unlawful act or a breach of duties might entail the employee’s liability for damages caused to the employer. In this case, the employer should prove the damages, the breach of duties, and that the dam - age is connected to that breach.
• have a specific duration that shall not exceed three years (five years for “ dirigenti ”). That said, parties rarely enter into non-compete agree - ments for such a long period of time, partly because this can lead to enforceability issues. Therefore, the duration normally agreed is between six months and one year from the termination of the employment rela - tionship. In order to assess the validity of a non-competition covenant, it is necessary to ascertain whether the combination of its terms and conditions, scope and geographical extent unduly restricts the employee’s ability to secure alternative employment or infringes upon their right to maintain their professional skills. Case law indicates that the following conditions need to be considered when making such an evaluation: • the content of the covenant (particularly with regard to the scope and geographical reach, to be assessed jointly); and • the skills and experience of the employee. The assessment must also take into account the con - sideration paid to the employee for their non-compe - tition obligations. The law does not prescribe a specific amount for this consideration; however, case law requires that the compensation be consistent with the restrictions pro - vided for by the non-competition clause. Therefore, the compensation has to be evaluated on a case-by- case basis together with the other terms agreed (ie duration, scope, geographical reach and the skills and experience of the employee). From a practical perspective, the compensation should be in a range of 20%-30% (or more) of the monthly salary received by the employee for each month of the duration of the obligation. Non-compete clauses are enforceable provided that the requirements indicated above are met. The enforceability of the clause does not depend on the reason for termination of employment. Unless it is specified otherwise, it applies to all types of termi -
2. Restrictive Covenants 2.1 Non-Competes
According to Article 2125 of the Italian Civil Code, the post-employment non-compete covenants may be deemed valid and enforceable only if they: • are specified in writing; • provide for a specific consideration in favour of the employee; • have a limited scope and geographical extent; and
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