Restrictive Covenants in Greece

Definition and Types of Restrictive Covenants

Restrictive covenants are contractual clauses limiting an employee’s activities during or after the dissolution of the employment relationship in order to protect the employer’s legitimate business interests. The most commonly used restrictive covenants in practice are confidentiality, non-compete and non-solicitation clauses.

a. Non-compete clauses

Greek law does not specifically regulate non-competition obligations either during or after the termination of the employment contract. During the term of the employment contract, the non-competition obligation of the employee is generally accepted to derive from the obligation of good faith towards the employer. As regards the post-termination period, the non-competition obligation can be assumed by agreement of the parties.

In general, the assumption of the above non-competition obligation by the employee may not (as such) impede the constitutionally established freedom of the employee to provide services nor may lead to an abuse of the employer’s rights. In accordance with the jurisprudence of the Greek courts, the validity of a non-compete obligation for the post-termination period depends mainly on the proportionality of the restrictions imposed upon the employee compared to the interests of the former employer which are being protected under the clause. The courts usually examine whether the obligations agreed with the employee are not excessive with respect to the duration of the non-compete obligation, the geographical area covered by the restriction (the more restricted the area, the more enforceable the clause), the scope of the prohibited activities (a list of existing competitors reinforces the validity of the clause), the manner of dissolution of the employment relationship (i.e. termination vs. resignation), the amount of severance indemnity (i.e. lawful severance indemnity or higher amount), the payment of a non-competition fee (which pursuant to recent jurisprudence of the Supreme Court is considered a requirement for the validity of the clause) and the existence of reasonable justified interests of the former employer.

In case of dispute, the non-compete obligation would be assessed by the courts, based on the characteristics of each individual case, in the context of the considerations mentioned above.

b. Non-solicitation of customers

Greek law does not specifically regulate non-solicitation of customers clauses. They are generally enforceable if reasonable in scope and duration.

c. Non-solicitation of employees

Greek law does not specifically regulate non-solicitation of employee clauses. They are generally enforceable if reasonable in scope and duration.

Enforcement of Restrictive Covenants – Process and Remedies

Employers may enforce restrictive covenants through civil court proceedings, injunctive relief to stop the competing activity and/or claims for damages. Courts assess enforceability based on proportionality and the protection of legitimate business interests.

Use and Limitations of Garden Leave

Under Greek law, garden leave refers to the employer’s right, during a period of notice of termination, to require the employee to refrain from performing their duties while remaining employed and receiving full remuneration.

This concept was expressly introduced into Greek law by Law 4808/2021, which clarified that garden leave is permissible only in the context of termination with notice. During this period, the employment relationship remains in force, meaning that the employee continues to be entitled to salary and benefits, while also remaining bound by duties such as loyalty and confidentiality.