Along with confidentiality agreements, covenants not to compete help companies protect their private information and limit unfair competition from employees who leave. If your company does business in Puerto Rico is important to understand that the courts in the Island disfavor non-compete clauses.
Article II sec. 16, of the Constitution of Puerto Rico recognizes the right of every worker to choose his occupation and freely resign. To protect this freedom of choice, courts have narrowly interpreted non-compete clauses and imposed strict requirements for their validity. When these are not met, the contract is deemed invalid and unenforceable.
In Arthur Young & Co. v. Vega, 137 D.P.R. 40 (1994), the Puerto Rico’s Supreme Court was emphatic and explicit in outlining five requirements to create a valid non-competition clause in Puerto Rico. Agreements that do not comport with the court's requirements are against public policy and unenforceable.
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