The employer’s withdraw from a non-competition agreement during the employment relationship is always unlawful

Court of Cassation, Order No 23723 of 1 September 2021

The right of the employer to withdraw unilaterally from the non-competition agreement constitutes a nullity clause since it is contrary to mandatory rules, so that it is irrelevant that the withdrawal was notified years before the end of the relationship

The contractual clause providing the employer’s right to unilaterally withdraw from the non-competition agreement is null, therefore it is irrelevant that the withdrawal was notified years before the termination of the employment relationship.
In the present case, the company and the employee entered into a non-competition agreement that provided the employer’s right to unilaterally withdraw from it, a right that the company exercised during the relationship, in particular six years before the termination of employment.
The employee filed a Court claim to obtain the compensation for the non-compete obligations, claiming that the employer’s unilateral termination clause was null and void on the grounds that it was contrary to mandatory rules. The Court of Appeal of Bologna upheld the judgment of the Tribunal of Reggio Emilia rejecting the employee’s claim on the grounds that there was no conflict with mandatory rules in this case because the employer terminated the non-compete agreement six years before the termination of the employment relationship and therefore the employee had not suffered any sacrifice in relation to the right to reorganize her future employment.
The employee appealed to the Court of Cassation, which overturned the decisions of the Court of appeal.
Thus, according to the Supreme Court, the circumstance that “the termination of the non-competition agreement took place during the employment relationship is not relevant, since the respective obligations were crystallized at the time the agreement was signed, which prevented the employee from planning for this part of his future employment and compressed his freedom; but that compression, precisely pursuant to Article 2125 of the Civil Code, could not take place without the employer’s obligation to pay the compensation: consideration which, in the present case, would end up being excluded if the employer himself were allowed to free himself ex post facto from the obligation (see Court of Cassation no. 3 of 2018)“.
Consequently, the Court of Cassation did not agree with “the territorial court’s assumption that the fact that the termination took place during the period of employment, even several years before (more than six) the termination of the employment relationship, did not constitute any restriction of the employee’s freedom to plan his future employment“.
Based on these premises, the Supreme Court upheld the appeal brought by the employee and set aside the decision of the court.