Is a non-compete clause enforceable in Tunisia?

It can be, but its validity depends on its scope: duration, territory and activity must remain reasonable and justified by a real interest. In an employment contract, financial compensation makes it much more robust. Have a Tunisian lawyer review the clause before signing or relying on it.

Is a non-compete clause valid without compensation?

Under French employment law, no: without compensation the clause is void. In other countries and in commercial contracts the rule varies, but a clause without compensation is more easily found excessive. Providing compensation is the safest approach.

What is the maximum length of a non-compete clause?

There is no single period that is valid everywhere. In practice, 6 to 24 months is common for employees, and sometimes longer on the sale of a business. The longer the period, the more it must be justified by the nature of the business and the compensation paid.

Clause templatesProtection

Non-compete clause

A non-compete clause stops an employee, partner or seller from carrying on a competing business after the relationship ends. It protects customers and know-how, but it restricts the freedom to work, so it is valid only if limited and justified. An overly broad clause risks being struck down and protecting no one.

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Clause template

1. For [PERIOD: e.g. 12 months] after this agreement ends, [NAME OF RESTRICTED PARTY] shall not, directly or through any other person, carry on the activity of [PRECISE DESCRIPTION OF ACTIVITY] on its own account or on behalf of a competitor. 2. This restriction is limited to the following territory: [PRECISE GEOGRAPHICAL AREA]. 3. This restriction is justified by the protection of the legitimate interests of [NAME OF PROTECTED PARTY], in particular [CUSTOMERS, KNOW-HOW, STRATEGIC INFORMATION]. 4. In consideration, [NAME OF PROTECTED PARTY] shall pay [NAME OF RESTRICTED PARTY] compensation of [AMOUNT OR PERCENTAGE] [PER MONTH / AS A LUMP SUM], payable [TERMS]. 5. [NAME OF PROTECTED PARTY] may waive this clause in writing no later than [TIME LIMIT] after the agreement ends, in which case the compensation ceases to be payable. 6. In the event of breach, the compensation ceases to be payable and [NAME OF RESTRICTED PARTY] shall compensate the loss suffered.

Replace the bracketed items before use.

Variants

Sale of business or shares version

For [PERIOD] from the completion date and within [TERRITORY], the Seller shall not set up, operate or take part in, directly or indirectly, any business competing with the business sold. The purchase price takes this undertaking into account, and no separate compensation is payable for it.

When to use it

You hire a salesperson or manager who will know your customers and pricing.
You sell your business or shares and the buyer wants to stop you taking the customers back.
You go into partnership and want to stop a partner running a competing business on the side.
You give a long, strategic assignment to a consultant who specialises in your sector.

Mistakes to avoid

Imposing a restriction with no limit in time or territory, or covering a whole sector rather than the activity actually carried on.
Leaving out financial compensation in an employment contract, or setting a token amount.
Providing no right to waive the clause, so compensation must be paid even when the restriction is no longer needed.
Copying a clause from another country without checking local employment and competition rules.

Country-specific notes

France
For employees, French Supreme Court case law (Social Chamber, 10 July 2002) requires all of: a legitimate business interest, limits in time and space, regard to the specific features of the job, and financial compensation. If any is missing the clause is void, and only the employee may rely on that.
Source: Lefebvre Dalloz, « Clause de non-concurrence » (employment law fact sheet)

Contracts that use this clause

Frequently asked questions

It can be, but its validity depends on its scope: duration, territory and activity must remain reasonable and justified by a real interest. In an employment contract, financial compensation makes it much more robust. Have a Tunisian lawyer review the clause before signing or relying on it.

Other Protection clauses

Sources

Lefebvre Dalloz, « Clause de non-concurrence » (employment law fact sheet)

Indicative template, to adapt to your situation. It does not replace legal advice.

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Non-compete clause

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Variants

Sale of business or shares version

When to use it

You hire a salesperson or manager who will know your customers and pricing.

You sell your business or shares and the buyer wants to stop you taking the customers back.

You go into partnership and want to stop a partner running a competing business on the side.

You give a long, strategic assignment to a consultant who specialises in your sector.

Mistakes to avoid

Imposing a restriction with no limit in time or territory, or covering a whole sector rather than the activity actually carried on.

Leaving out financial compensation in an employment contract, or setting a token amount.

Providing no right to waive the clause, so compensation must be paid even when the restriction is no longer needed.

Copying a clause from another country without checking local employment and competition rules.

Country-specific notes

France

For employees, French Supreme Court case law (Social Chamber, 10 July 2002) requires all of: a legitimate business interest, limits in time and space, regard to the specific features of the job, and financial compensation. If any is missing the clause is void, and only the employee may rely on that.

Lefebvre Dalloz, « Clause de non-concurrence » (employment law fact sheet)