Resumen de Non-compete agreements in lithuanian labor law
Daiva Petrylaite, Vida Petrylaite
Social conditions, economic relations, and new technological processes are getting more and more complicated with every day. Noncompete agreements are becoming one of the instruments helping employers protect their business interests. The Lithuanian legal regulation and approach to such non-compete clauses has experienced an interesting development path. Mainly, such agreements (or special clauses in employment contracts) came into use much earlier than the legal regulation on the matter was adopted. Lithuanian employers, mostly taking examples from other European Union countries with more developed practice of employment relations, started to conclude non-compete agreements with employees in order to protect their legitimate business interests. In noncompete agreements, employees undertake not to engage in any activity that would compete with the employer’s business. However, at the same time, such agreements have the effect of restricting the constitutional right of employees to a free choice of work and the right to engage in lawful business activity. As no direct regulation of non-compete agreements between employees and employers was yet in place at that moment, the lack of legal transparency was filled by case law developed by the Lithuanian Supreme Court on this matter. Therefore, the case law was of crucial importance in interpreting non-compete agreements. The main idea of the relevant case law that was accepted and repeated in all subsequent cases was that absence of legal regulation did not mean that such type of agreements between the employer and the employee were prohibited. In order to legitimize such agreements, the case law had to formulate the relevant legal basis.
