Payment of a non-competition agreement

According to the Supreme Court decision of October 23, 2024 (III PSK 124/23), a non-competition agreement, after the termination of the employment relationship, is a paid agreement. The legislator protects the benefit due to the employee. This results from art. 1012 § 3 of the Labor Code, in which its guaranteed amount is specified. On the other hand, art. 1012 § 2 of the Labor Code clearly states that the employee’s benefit (non-competition agreement) ceases to apply before the termination of the contract, if the reasons justifying such a ban cease to exist or the employer fails to fulfill the obligation to pay compensation. This means that the fulfillment of these conditions applies only to the obligation that the employee has undertaken and means that the employee is released from the obligation to refrain from conducting activities competitive to the employer, and not the employer’s obligation to pay the agreed compensation. According to the legislator, the employee retains the right to compensation even when the employer fails to fulfill their obligation and when the employee’s performance has lost its significance for them. This rule is binding and cannot be changed by contractual provisions.