For violating the non-compete clause, an employee is liable under the provisions on financial liability set forth in the Labor Code. It is not permissible to stipulate a contractual penalty for an employee's violation of the non-compete clause during the employment relationship.
No possibility of stipulating a contractual penalty
An employee's liability for violating the non-competition clause during the employment relationship is regulated in Article 101[1] § 2 of the Labor Code. Pursuant to this provision, an employer who has suffered damage as a result of an employee's breach of the non-competition clause provided for in the contract may claim compensation from the employee under the terms specified in the provisions on the financial liability of employees.
Labor law provisions do not provide for the possibility of applying a contractual penalty in this case. Since employee liability for violating a non-compete clause is exhaustively regulated in the Labor Code, it is also not possible to resort to the institution of a contractual penalty provided for in the Civil Code (Article 483 of the Civil Code in conjunction with Article 300 of the Labor Code). The provisions of the Civil Code apply accordingly only to matters not regulated by labor law.
The above position was confirmed by the Supreme Court, which found that the clause introducing a contractual penalty for violating the non-competition clause during the employment relationship is inconsistent with the labor law (judgment of the Supreme Court of 2 October 2002, I PKN 549/01).
Employee responsibility
In the event of a breach of the non-compete clause, the employer may seek compensation in court. The extent of this liability depends on the employee's fault:
- Unintentional fault: The employee's liability is limited to three months' salary.
- Intentional fault: The employee is liable for the full amount of the damage.
An employee's participation in competitive activity may also constitute grounds for termination of an employment contract, even if the parties have not entered into a non-competition agreement. In such a case, liability is based on a breach of the employee's fundamental duty to care for the good of the workplace, protect its property, and maintain the confidentiality of information, the disclosure of which could expose the employer to harm, i.e., Article 100 § 2 item 4) of the Labor Code (Supreme Court Resolution of April 9, 2024, I PSK 108/23).
Summary
Under current law, there are no grounds for imposing contractual penalties on employees who violate the non-compete clause during their employment relationship. Any contractual provisions providing for such penalties are ineffective, and employers may pursue claims only under the principles of employee financial liability.
This article is for informational purposes only and does not constitute legal advice.
The law is current as of April 10, 2026 .
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