Employment Law, Government & Legislation

Restraints of Trade (Germany)

In Germany the Civil Commercial Code prohibits agreements between employers restricting the employee solicitation. In NZ, there is no law prohibiting such agreements and Restraint-of-Trade clauses are quite common. They are considered invalid, unless there are reasonable grounds and some form of consideration.

The German Federal Civil Supreme Court has just recently decided that it is illegal for an employer to actively poach an employee of another employer. However, employees may (of course) initiate such contact, obviously for the same policy reasons as in NZ (freedom of employment). There are also other exceptions where non-solicitation clauses or agreements are valid if it is necessary to protect legitimate business interests. A common example are temp worker agreements, where the contract usually provides that the hiring company may not offer employment to the temp worker.