WORKER'S DEBT OF LOYALTY
The worker cannot compete against the employer from the moment he is hired until the end of his employment contract. Because competition within the said period of time constitutes a violation of the duty of loyalty. In accordance with Article 25/IIb, d and e of the Labor Law, the employee's behavior that does not comply with honesty and loyalty is considered a violation of the duty of loyalty. In these cases, the employer may terminate the employment contract or request compensation.
EMPLOYEE'S OBLIGATION FOR NOT COMPETING AFTER THE END OF EMPLOYMENT CONTRACT
The duty of non-competition, like the employee's other debts, is not among the debts that are in question for every employment contract. It is an obligation within the duty of loyalty for the employee not to compete with the employer during the continuation of the employment contract. On the other hand, while the employment relationship continues, the parties may decide to include a provision in the employment contract stating that the employee will not compete after the end of the contract, or to conclude a separate agreement on this issue (non-competition agreement). After the employment contract ends, the employee has an obligation not to compete with the employer only if such an obligation is agreed upon by contract.[1].
TERMINATION OF EMPLOYMENT AGREEMENT IN CASE OF VIOLATION OF THE DEBT OF LOYALTY
As mentioned above, in case of violation of the duty of loyalty, the employer may terminate the employment contract. Apart from the labor law, the employee's duty of care and loyalty and the obligation to keep secrets are defined in the Code of Obligations No. 6098. According to the mentioned article;
“ARTICLE 396- The worker is obliged to perform the work undertaken diligently and to act faithfully in protecting the legitimate interests of the employer.
The worker is obliged to properly use the employer's machines, tools and equipment, technical systems, facilities and vehicles, and to take care of the materials handed over to him to perform the work.
As long as the service relationship continues, the employee cannot provide services to a third party for a fee, contrary to his duty of loyalty, and cannot compete with his own employer.
The worker cannot use for his own benefit or disclose to others the information he learned while working, especially production and business secrets, during the continuation of the service relationship. The employee is obliged to keep secrets to the extent necessary to protect the legitimate interests of the employer, even after the termination of the employment relationship.”
LEGAL DEFINITION OF NON-COMPETITION
The definition, conditions, limitations and consequences of non-compliance with the non-competition prohibition, which is the subject of this article, are listed in the Turkish Code of Obligations No. 6098.
VII. non-competition
1. Conditions
ARTICLE 444- “ The worker who has the capacity to act shall refrain from competing with the employer in any way after the termination of the contract, especially from opening a rival business on his own account, from working in another rival business or, apart from these, from engaging in any other type of benefit relationship with the rival business.” may be undertaken in writing.
The non-competition clause is valid only if the service relationship provides the employee with the opportunity to obtain information about the customer environment or production secrets or the work done by the employer, and at the same time, the use of this information is likely to cause significant damage to the employer.”
According to the Code of Obligations, in cases where the employee has the opportunity to know the customers who are in contact with the employer and to have access to all the details of the work in progress, after the termination of the employment contract, it contains a condition that the employee should not do business on his own behalf in a way that would create competition with the employer, should not be a partner in a competing company, or should not work under an employment contract. Contracts are valid if they are in writing.
– LIMITATION OF PROHIBITION OF COMPETITION
However, according to Article 445 of the Law, it is stated that the non-competition must be limited according to the situation in terms of time, place and type of work in order not to endanger the economic future of the worker. Accordingly, the non-competition will not be valid unless it is limited in terms of time, place and type of business. Limitations need to be determined according to the nature of the job and even the nature of the worker. Limitations need to be determined according to the nature of the job and even the nature of the worker.
A. LIMITATION IN TERMS OF LOCATION
Therefore, the regulations stipulated in terms of non-competition within the borders of Türkiye will not be valid. However, for a worker who is a foreign national and has spent most of his life outside Türkiye, it may be possible to determine the non-competition clause by the country's borders. [2] Additionally, limitation to provincial borders or a certain region may be appropriate depending on the nature of the work. Even though there is no place limitation in the non-competition clause, the non-competition clause will be considered valid if the worker works for a rival company operating in the same location [3] .
B. DURATION LIMITATION
A non-competition ban may be imposed for a period not exceeding two years. Otherwise, it may cause economic ruin for the worker.
C. LIMITATION IN TERMS OF THE NATURE OF THE WORK
It should be clearly determined which of the employer's business(es) the non-competition restriction is limited to. Especially in our country, where the scope of activity of companies is kept wide during registration in the trade registry, such a limitation should be imposed on jobs that are directly related to the work performed by the worker in the employer's workplace and fall within the employer's main field of activity.
– JUDGE'S LIMITATION AUTHORITY
The law gives the judge the authority to limit excessive non-competition restrictions. Accordingly, the Judge may limit the excessive prohibition of competition in terms of its scope or duration, by freely evaluating all situations and conditions and by equitably taking into consideration any counter action that the employer may have undertaken.
As a rule, the regulation stipulating the prohibition of competition between the employee and the employer remains valid in the event of a workplace transfer. If the transferee employer turns to another purpose and changes its field of activity, the non-competition clause ends.
– VIOLATION OF THE PROHIBITION OF COMPETITION
As a result of the violation of the non-competition clause, the employee is obliged to compensate for all damages suffered by the employer as a result of the violation of this prohibition. Parties are free to determine penal terms for non-competition. However, if the damage is more than the penalty amount, the worker must compensate for the damage exceeding this amount. If it is written in the contract and to the extent that the importance of the violated interest justifies it, the employer may request that the employer be forced to act contrary to the prohibition, in addition to damages and penal clauses. The sanction, which stipulates a certain payment agreed upon by the parties for the violation of the non-competition clause, is a penal clause in its nature. Penal clause is an accessory debt and its validity depends on the validity of the main debt. Therefore, if the non-competition clause is invalid (if it is not written, if it does not comply with the limitations in terms of time and place), the penal clause based on this prohibition will also be invalid.
– PROHIBITION OF COMPETITION AND UNFAIR COMPETITION
Provision No. 54 of the Turkish Commercial Code defines unfair competition as "Deceptive or otherwise contrary to the rule of honesty and commercial practices that affect the relations between competitors or between suppliers and customers are unfair and unlawful ." He defined it as. Situations of unfair competition are not limited to the cases listed in Article 55, and even if an action does not fall within the scope of one of the situations regulated in the relevant article, it may constitute unfair competition in accordance with the general provision in Article 54.
TTK. Art. According to Article 54, unfair competition can occur through "deceptive" or "behavior contrary to the rule of honesty". These situations can occur in very different ways, depending on the conditions of the concrete event and the conditions of trade and economic structure at the time the action took place. Therefore, if an employee who has left the job is in a position to use the information, adaptations and secrets that he/she has obtained and learned from his/her former employer regarding the project and which the former employer has a legitimate interest in keeping secret, in favor of the new employer or against the former employer, this situation may be considered as behavior contrary to the rules of good faith. In this case, in cases where the obligation not to compete is unnecessary or does not exist, the former employer may have the right to claim compensation based on unfair competition provisions.
– PROHIBITION OF COMPETITION AND APPLICABLE COURT
In case of violation of the prohibition of non-competition arising from the employee's duty of loyalty during the continuation of the employment contract, the court responsible for hearing such cases is the labor court. In case of violation of the non-competition clause after the termination of the employment contract, the lawsuits to be filed based on this have been determined to be absolute commercial lawsuits, regardless of the nature of the parties, in view of the articles 444 and 447 of the Turkish Code of Obligations No. 6098 and the express provision of the +/1-3 article of the Turkish Commercial Code. For this reason, these cases must be examined and decided in the commercial court.[4].
– STATUTE OF LIMITATIONS FOR PROHIBITION OF COMPETITION
Claims for compensation related to the prohibition of competition are subject to the statute of limitations for compensation claims and are 10 years.
– TERMINATION OF THE PROHIBITION OF COMPETITION
According to Article 447 of the Code of Obligations;
“The prohibition of competition ends if it is determined that the employer has no real interest in maintaining this prohibition.
If the contract is terminated by the employer without a justified reason or by the employee for a reason attributable to the employer, the non-competition period ends.”
As can be seen, provisions regarding non-competition in employment contracts need to be carefully prepared. The knowledge that employees have and the nature of the job at the new workplace are important in terms of compensation liability. For employers, the careful preparation of this article will affect compensation claims in the future. We recommend that you get professional legal support from CVG Law Firm in the preparation of competition agreements.
For More Detailed Information:
info@cvghukuk.com
| Hunting. I. Can Çayırpare | email: can.cayirpare@cvghukuk.com | Tel: 0532 474 30 35 |
| Hunting. B. Güven Cem | email: guven.cem@cvghukuk.com | Tel: 0533 740 86 28 |
| Hunting. Volkan Önkibar | email: volkan.onkibar@cvghukuk.com | Tel: 0535 662 61 06 |
[1] Prof. Dr. S. Süzek, Labor Law, Beta Publications, 2005, P.227
[2] Supreme Court 9th HD. E.2007/17185, K.2008/11014 and decision dated 02.05.2008
[3] Supreme Court 9th HD. E.2009/3417, K.2011/2307 and decision dated 03/02/2011
[4] HGK E.2012/9-854ü K. 2013/292 and decision dated 27.02.2013
