AZERBAIJAN Law and Practice Contributed by: Farid Nabili, Pari Gasimli and Sona Abdullayeva, Caspian Legal Center
damage caused by the employee’s action or inaction, the employee shall not be liable for any loss of income or profit that the employer may have received in the future.
to hinder employees from recruiting or attempting to recruit employees, service providers or management/ supervisory personnel from the employer. It is typical for employers to conclude an agreement that includes both non-compete and non-solicitation clauses because of their shared characteristics. From the legal interests perspective of employees, such non-solicit agreements or clauses may be con - sidered as restrictive regarding right to employment, therefore leading to questions concerning their legal validity. 3. Data Privacy 3.1 Data Privacy Law and Employment After the conclusion of an employment contract, the transfer of information about an employee’s labour activity to other persons is regulated by the laws of the Republic of Azerbaijan “On Personal Data”, and “On Access to Information”, with the exception of the transfer of general information on labour activity to the employer. Accordingly, personal data transfer to third parties requires written consent from the data subject – in the employment context, the employee. This consent can be provided through written form or via the Elec - tronic Government Information System. The exception covers exceptional cases like the employee’s death and similar situations. Employees can also withdraw their consent in the same way. Once withdrawal is communicated, the effect is immediate, requiring the employer and third parties to cease data trans - fers immediately. This creates an ongoing obligation for all parties to monitor consent status and respond promptly to withdrawal requests. The legislation provides three specific categories where data transfers can occur without explicit con - sent. • Open category personal data – This category includes information about the employee that has been anonymised in accordance with the estab - lished procedure, declared open by the employee, or entered into an information system created for
2. Restrictive Covenants 2.1 Non-Competes
Under Azerbaijani law, legislative references to non- competition are limited to provision within the sample employment contract contained in the Labour Code. This provision permits employees to undertake sub - stitute work outside regular working hours or, subject to employer consent, during working hours at addi - tional workplaces, provided such employment does not compete with the primary employer’s business interests. Notwithstanding the limited statutory framework, employers routinely incorporate non-competition clauses into employment contracts or conclude sepa - rate non-competition agreements with their employ - ees. The rationale is to safeguard business interests by restricting employees from participating in compet - itive activities both during the employment relation - ship and also following its termination. The clauses usually encompass: • temporal limitations on the duration of restrictions; • prohibited industries or business activities in which the employee may not engage; and • restricted classes of persons including custom - ers, clients or employees with whom the former employee is precluded from conducting business. The moment an employer believes an employee has contravened relevant non-competition provisions, standard practice involves issuing a formal demand requiring immediate cessation of the violations and payment of compensation to the employer. Failure to comply with such demands may result in termination of the employment contract by the employer. 2.2 Non-Solicits Similar to non-compete agreements, non-solicitation provisions prohibit former employees from contacting current clients, customers and suppliers. They serve
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