Supreme Court on disguised non-compete clauses

Contract clauses prohibiting employees from contacting clients or colleagues of their former employer after leaving go by many names: client protection clause, non-solicitation, "employee protection clause". In decision 9 ObA 6/26m of 27 May 2026 – published by the court itself under the title "non-compete clause in sheep's clothing" – the Austrian Supreme Court clarified: content counts, not the heading.

The decision

If such a clause substantially restricts the employee's gainful activity after the end of the employment relationship, it must be treated as a non-compete clause under § 36 AngG – with all statutory limits: it applies only above a certain pay threshold, for at most one year, restricted to the employer's line of business, and it must not unreasonably impede the employee's advancement. A clause missing these limits is invalid – regardless of what it is called.

What this means for employers

Anyone wanting to protect their client or staff network should have existing templates reviewed: contact and non-solicitation bans that in effect operate as a ban on working hold up only under the conditions for non-compete clauses. Much remains negotiable – scope, measured contractual penalties, duration – but the framework is narrower than many templates suggest.

What this means for employees

Anyone who believes themselves bound by such a clause should have it reviewed before changing jobs. It frequently turns out not to apply at all – for lack of the pay threshold, for exceeding the one-year limit, or following a dismissal by the employer.