Non-competes in employment contracts: (Un)justified restrictions on the freedom to work

Abstract

The author analyses the normative and practical aspects of non-competes as a labour law institute. The hypothesis presented in the paper is that although non-compete clauses should exist, there is a need to further limit the inclusion of such clauses in employment contracts (especially post-contractual non-competes), so that there would not be an unjustified limitation on the freedom to work. The aim of the paper is to present the advantages and disadvantages of non-competes from the (opposed) perspectives of the employer and employee, and to indicate which provisions in the Serbian legal framework should potentially be revised in order to avoid employers abusing non-competes in practice. The paper contains an analysis of the legal framework in Serbia and a brief overview of solutions from certain European Union member states which could be utilized as guidelines for amending Serbian legislation, as well as an analysis of the results of a survey conducted through a questionnaire which demonstrates that employees are not very familiar with non-competes. Finally, the author conducted interviews with respondents who have or have had non-competes in their employment contract. Based on the interviews, it was concluded that employees agree to the non-competes out of fear of not getting employed, despite believing that there is no justified basis for such a clause.