Global HR Hot Topic - July 2012: Non-Competes and Other Restrictive Covenants in the Cross-Border Context



Employment-context restrictive covenants (non-compete, confidentiality, trade secret and non-solicitation agreements) are vital tools for international businesses in this information age. But enforcing these across multiple jurisdictions implicates wildly different rules.

Having discussed in our previous Global HR Hot Topic of June 2012 “plain vanilla” single jurisdiction restrictive covenants where an employee was hired, worked and then allegedly breaches in just one foreign jurisdiction (and where any covenanted choice-of law clause refers back to that same jurisdiction), we turn here to the conflict-of-laws problem of cross-border restrictive covenants. These are restrictive covenants with a geographic scope that spans more than one country, and covenants with a border-crossing employee like an expatriate, mobile worker or employee with regional/global responsibilities, and covenants with a choice-of-law clause that implicates some legal regime other than the host country’s. To determine which jurisdiction’s law controls the enforceability of a cross border restrictive covenant, confront two separate issues: choice-of-law clause and relevant jurisdictions.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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