Supreme Court on disguised non-compete clauses

Contract clauses prohibiting employees from contacting clients or colleagues of their former employer after leaving go by many names: client protection clause, non-solicitation, "employee protection clause". The Austrian Supreme Court clarified in decision 9 ObA 6/26m of 27 May 2026, which it published itself under the title "non-compete clause in sheep's clothing", that what matters is the content and not the heading.

The decision

If such a clause substantially restricts the employee's gainful activity after the end of the employment relationship, it must be treated as a non-compete clause under § 36 AngG, with all statutory limits: it applies only above a certain pay threshold, for at most one year and restricted to the employer's line of business; it must not unreasonably impede the employee's advancement. A clause that does not keep within these limits is invalid regardless of what it is called.

What this means for employers

Anyone wanting to protect their client or staff network should have existing templates reviewed. Contact and non-solicitation bans that in effect operate as a ban on working hold up only under the conditions for non-compete clauses. Much remains open to drafting, such as the scope of the clause, moderate contractual penalties and the duration; the framework, however, is narrower than many templates suggest.

What this means for employees

For employees who believe themselves bound by such a clause, a review before changing jobs is advisable. It frequently turns out that the clause does not apply, because the pay is below the threshold or because the one-year limit is exceeded; after a dismissal by the employer the clause survives only where the employee culpably gave cause for it or the employer continues to pay the salary for the duration of the restriction (§ 37 Abs 2 AngG).