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Non Compete In Severance Agreement

Non Compete In Severance Agreement Template for Germany

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Key Requirements PROMPT example:

Non Compete In Severance Agreement

"I need a Non Compete in Severance Agreement for our departing Chief Technology Officer in Munich, who will be leaving on March 1, 2025; we need to restrict work with direct competitors in the autonomous vehicle industry for 18 months and include provisions for ongoing technical knowledge transfer."

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Document background
This Non-Compete in Severance Agreement is essential when terminating employment relationships in Germany where protecting business interests is crucial. It is particularly relevant for employees with access to sensitive information, key client relationships, or specialized knowledge. The document must strictly comply with German labor law requirements, especially Sections 74-75 of the German Commercial Code (HGB), which mandate minimum compensation of 50% of previous remuneration during the non-compete period. The agreement is typically used when terminating employment of senior staff, technical experts, or sales professionals where preventing immediate competition is crucial. It combines standard severance provisions with carefully crafted non-compete clauses, ensuring both parties' interests are protected while maintaining enforceability under German law. The document should be prepared with consideration of the specific industry context, the employee's role, and the legitimate business interests requiring protection.
Suggested Sections

1. Parties: Identification of the employer and employee, including full legal names and addresses

2. Background: Context of the agreement, including reference to the termination of employment and general purpose of the agreement

3. Definitions: Key terms used throughout the agreement, including 'Competitive Activity', 'Restricted Territory', and 'Restricted Period'

4. Termination of Employment: Confirmation of employment termination date and general severance terms

5. Non-Compete Obligations: Detailed scope of competitive restrictions, including geographical limits, prohibited activities, and duration

6. Compensation for Non-Compete: Specific details of the compensation for the non-compete period (minimum 50% of last remuneration as per German law)

7. Payment Terms: Schedule and method of compensation payments

8. Exceptions and Permitted Activities: Activities explicitly allowed during the restricted period

9. Confidentiality Obligations: Ongoing duties regarding confidential information

10. Breach and Remedies: Consequences of breach and available remedies

11. Severability: Provisions ensuring remainder of agreement stays valid if any part is found unenforceable

12. Governing Law: Confirmation of German law application and jurisdiction

Optional Sections

1. Garden Leave: Include when there is a period between notice and termination where employee remains employed but not working

2. Customer Non-Solicitation: Additional restrictions on approaching customers, if relevant to the employee's role

3. Employee Non-Solicitation: Additional restrictions on approaching employees, if relevant to the employee's position

4. Return of Company Property: Include if there are specific company materials or property to be returned

5. Cooperation Clause: Include if ongoing cooperation is needed for transition or pending matters

6. Reference Letter: Include if agreement includes terms about providing employment references

7. Tax Treatment: Include if special tax considerations apply to the severance or non-compete payments

8. Insurance Continuation: Include if any insurance benefits are continuing post-employment

Suggested Schedules

1. Schedule 1 - Compensation Calculation: Detailed breakdown of non-compete compensation calculation

2. Schedule 2 - Restricted Territory: Detailed definition and/or map of geographical restrictions

3. Schedule 3 - Competitor List: If applicable, specific list of companies considered competitors

4. Schedule 4 - Severance Payment Schedule: Detailed payment schedule for severance and non-compete compensation

5. Appendix A - Acknowledgment Form: Form for employee to acknowledge receipt and understanding of obligations

6. Appendix B - Release of Claims: If applicable, general release of claims against the employer

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈË°æ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

alex.den.21@genieai.co
Relevant legal definitions






























Clauses




























Relevant Industries

Technology

Financial Services

Professional Services

Manufacturing

Pharmaceuticals

Biotechnology

Industrial Engineering

Consumer Goods

Chemical Industry

Telecommunications

Management Consulting

Software Development

Research and Development

Healthcare

Relevant Teams

Legal

Human Resources

Executive Leadership

Sales

Research and Development

Product Development

Finance

Operations

Information Technology

Business Development

Strategic Planning

Relevant Roles

Chief Executive Officer

Chief Technology Officer

Senior Software Engineer

Sales Director

Key Account Manager

Research Scientist

Product Manager

Technical Lead

Business Development Manager

Financial Controller

Operations Director

Senior Consultant

Regional Sales Manager

Head of Research and Development

Chief Marketing Officer

Senior Project Manager

Technical Architect

Investment Manager

Department Head

Managing Director

Industries








Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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