Definition and Types of Restrictive Covenants
During the employment relationship, employees are obliged to respect in respect to employer´s intellectual property, confidentiality and non-compete provisions. There are no specific laws about restrictive covenants after termination of employment. However, the Constitution provides freedom of work, which means that the employee may challenge any non-compete or non-solicitation provisions after termination of employment.
Types of Restrictive Covenants
- Non-Compete Clauses
The employee is obliged by labour laws not to compete with the employer during the labour relationship. Labour Courts have ruled that non-compete provisions after termination are only permissible if they are limited in time (maximum 2 years, in exceptional cases can be exceeded) and compensated (at least 50% of monthly salary, approx.). Failure to follow these requirements will render a non-compete provision null and unenforceable.
- Non-solicitation of customers
The employee is bound during the labour relationship. After termination, it will be analysed as a non-compete provision.
- Non-solicitation of employees
Non-solicitation of employees is unenforceable in Argentina due to the employee´s constitutional right of freedom to work.