In accordance with the fidelity obligation, the employee is under the obligation not to compete with the employer during the continuation of the employment contract. This obligation sometimes continues for a certain period of time after the employment contract has expired. So much so that the employee’s use of the information he learned while working after the termination of the employment contract may harm the legitimate interests of the employer.
In accordance with Article 444 of the Turkish Law of Obligations No. 6098, which regulates the prohibition of non-competition after the termination of the employment contract;
An employee who has the capacity to act may undertake in writing to refrain from competing with the employer in any way after the termination of the contract, in particular from opening a rival business on his own account, from working in another rival business or apart from these from engaging in any other type of interest relationship with the rival business.
Non-competition registration is valid only if the service relationship provides the employee with the opportunity to obtain information about the customer environment or production secrets or the work done by the employer, and at the same time, if the use of this information is likely to cause significant damage to the employer.
1. Non-Competition Agreement Must Be in Writing.
The primary condition for a non-competition agreement to be valid is that the agreement be made in writing. The purpose of the written form requirement is to protect the worker by ensuring that the worker is informed about the scope of the ban. As a rule, only the worker’s signature on the contract is sufficient, since only the worker is obliged to do so with the non-competition clause. However, if the employer undertakes an action in return for a non-competition clause, the employer’s signature is also required. It should be noted that the written form is a necessary condition for any changes to be made in the contract.
The 9th Civil Chamber of the Supreme Court of Appeals, Merits No. 2010/25792 and Decision No. 2013/10539;
Non-compliance with the form requirement is a reason for nullity, and the assertion of invalidity by the employee is not subject to the principles regarding abuse of rights. Because the employee cannot be expected to warn the employer about compliance with the formality requirement; It is up to the employer to ensure that the ban is validly decided. Therefore, in cases where the prohibition is invalid due to irregularity, it is not possible for the employer to want to enforce the contract by stating that the contract has been acted against and that the invalidity cannot be claimed by the employee. Undoubtedly, in this regard, cases where the employee deceives the employer are reserved. On the other hand, if the irregularity is based on a fault of the employer or his representative, the employer should not be given the opportunity to escape from an agreed counter act by objecting to the invalidity.[1]
2. There Must Be a Possibility of the Employer Suffering a Significant Damage.
Another condition of the non-competition agreement is the existence of a possibility that the employer will suffer significant damage. In particular, it should be noted that the Law does not consider the non-competition valid in every possibility of damage, but only in case there is a possibility of significant damage. In addition, there is no requirement to prove the existence of a concrete damage, but the existence of a possibility that the employee will cause significant damage to the employer after the employment contract with the information obtained is sought as a necessary condition. In other words, it is not necessary for the damage to actually occur but the existence of an imminent and significant possibility of damage is sufficient.
3. The Prohibition of Competition Should Not Endanger the Economic Future of the Worker in a Contrary to Equity.
The third condition for the non-competition to be valid is that the prohibition in question does not unfairly endanger the economic future of the worker. Because an unlimited non-competition ban will cause the worker not to be able to offer his labor to the employment market and his freedom to work will be eliminated. In accordance with Article 445 of the Turkish Law of Obligations;
The non-competition cannot contain inappropriate restrictions in terms of place, time and type of work that would unfairly endanger the economic future of the worker, and its duration cannot exceed two years, except for special cases and conditions.
Supreme Court Assembly of Civil Chambers, Merits No. 2019/447 Principles and Decision No. 2022/315;
Although Article 10 of the agreement between the parties stipulates time and subject (type of work) limitations regarding the non-competition clause, no space limitation is foreseen. In this respect, the non-competition agreement drawn up between the parties in accordance with Article 349 of the Law of Obligations No. 818, which was in force at the time the agreement was made, is invalid as soon as it is made.[2]
11th Civil Chamber of the Supreme Court, Merits No. 2015/8396 and Decision No. 2016/3470;
In the concrete case, when the provisions of the contract between the plaintiff and the defendant regulating the non-competition and the provisions referring to the non-competition are evaluated; The court found that the non-competition period was determined as one year in the competition agreement, but the fact that there was no limitation in terms of location and business type was accepted as the reason for the invalidity of the agreement and the case was decided to be rejected. However, according to the regulation in the contract, it was stated that the defendant worker could not operate in the same content as the subject of the contract in other companies and institutions operating in the same field as the plaintiff company, and that the non-competition clause was sectoral, and that a penalty would be paid in case of non-competition, regardless of whether the company suffered any losses. While the defendant works as a sales manager in the plaintiff company within the borders of … Although there is no clear limitation in terms of location in the non-competition agreement, it is obvious that the defendant works in another company within the same province, in the same sector and with the same capacity. In addition, it is understood that the defendant, who was a sales manager in the plaintiff company, obtained information about the customer circle of the plaintiff company and that the use of this information could cause harm to the plaintiff company.[3]
Conclusion;
The Prohibition of Competition, regulated in Article 444 and following articles of the Turkish Code of Obligations No. 6098, is the subject of Supreme Court decisions in terms of whether the validity conditions are met or not. The Supreme Court does not consider the employee’s assertion of non-compliance with the written form requirement as an abuse of right. According to the Supreme Court, it is the employer who is responsible for ensuring that the ban is decided validly. So much so that the employee, who is the weak party of the employment contract, cannot be expected to warn the employer about the conclusion of the contract as stipulated in the Law. Therefore, it is not possible for the employer to want to enforce a contract that is invalid in terms of form by stating that the invalidity cannot be claimed by the employee.
On the other hand, the non-competition agreement should not unfairly jeopardize the economic future of the worker. In this context, the scope of the prohibition in the non-competition agreement must be clearly limited in terms of place, time and type of business. The Supreme Court, which considers a regulation that does not include such a limitation as a violation of the employee’s freedom to work, also considers working in another company within the same provincial borders, in the same sector and with the same capacity as a violation of the non-competition agreement, depending on the concrete case, even if it is not expressly agreed in the contract.
[1] The 9th Civil Chamber of the Supreme Court of Appeals, Merits No. 2010/25792 and Decision No. 2013/10539
[2] Supreme Court Assembly of Civil Chambers, Merits No. 2019/447 and Decision No. 2022/315
[3] 11th Civil Chamber of the Supreme Court, Merits No. 2015/8396 and Decision No. 2016/3470