Under Article 20 of the Regulations to the abrogated Organic Labor Law (which is still in force as long as its rules do not contravene the New Labor Law), the enforcement of non-compete provisions is limited.

Such Article expressly provides that during the employment relationship, the employee shall refrain from carrying out negotiations on her/his own behalf or on behalf of others, unless she/he is expressly or tacitly authorized otherwise.

This duty may be required of an employee for up to six months as of termination of the employment relationship. For that, among other requirements, the Regulations establish that such obligation must be agreed at the beginning of the employment relationship.

Article 20 of the Regulations states the following:

 “During the employment relationship, the employee must abstain from any negotiation on his own or on behalf third parties, that may damage the interests of the company, except in the case the employer has authorized it expressly or tacitly.

This obligation may be required for a period of up to six months after the extinction of the employment relationship, provided that: (a) it is based on justified reasons, considering the relationship of the worker with costumers, his condition of management employee, his knowledge of industrial or commercial secrets of the employer, and any other circumstance of a similar nature; (b) there is a written agreement at the beginning of the employment relationship that warrants the unfair competition; and (c) compensation is agreed upon in favor of the employee, for as long as the non-compete clause is in force.

Based on the above-mentioned, the requirements for a non-compete clause under Venezuelan legislation are as follows:

  1. The employee’s obligation must be agreed at the beginning of the employment relationship.
  2. The non-compete clause during the employment relationship can be presented to all the employees.
  3. The non-compete clause after termination of the employment relationship (up to six months) can be required based on justified reasons, considering the relationship of the worker with costumers, his condition of management employee, his knowledge of industrial or commercial secrets of the employer, and any other circumstance of a similar nature.
  4. Cash consideration is only required if the obligation is imposed to be fulfilled by the employee after termination of the employment relationship. Specific amounts are not established.

However, there has not been a lawsuit against an employee in Venezuela for such matter.

Employee’s non-solicit provisions are not regulated under Venezuelan legislation.

Leave a Reply

Your email address will not be published. Required fields are marked *