"The question is not whether the non-competition payments were given within the framework of the employee-employer relationship or not, since even non-competition payments that are given outside the framework of the employee-employer relationship can be considered fruitful income. Therefore, the fact that the non-compete clause in this case is adisgrace to the appellants even in their hat as entrepreneurs and founders of Yad Yitzhak, does not in itself turn the stipulation into 'cutting down the tree'. the nature of the receipt must be derived from the nature of the non-competition clause and its characteristics in the concrete case" (Gangina, paragraph 38 of the judgment of Justice Y. Amit; and see also the Barnea case, paragraphs 50-57 of the judgment of Justice Y. Amit).
If so, in order to decide what "The breach" In order to fulfill the receipt that Kahane received, we must examine the characteristics of the non-compete agreement in our case accordingly, for example "The tree and the fruit". In other words, we must examine whether in the non-compete agreement, Kahane waived the production factors themselves, so that we are dealing with:"Cutting down the tree" Or has he waived his right to income from the factors of production for a certain period of time, so that it is a matter of"Picking the fruit of the tree", or "Pruning" Temporary of "Industry" From the branches of the tree.
- As noted above, when we are dealing with a non-compete stipulation on the part of a flesh and blood entity, the human capital that enables him to earn a living is the "tree", while the wages that he derives from his human capital are the "fruits". Therefore, it was held that as a rule, the non-competition clause will not amount to "cutting down the tree", since as a rule, the non-competition clause does not negate the ability to grow fruits in the future.
At the same time, in the matter of Barnea The judge left Y. Amit A narrow opening according to which there may be circumstances in which it is possible to consider whether it is a capital receipt, for example when it comes to a non-compete clause "Sweeping and unlimited in time" (עניין Barnea, paragraph 49 of the judge's judgment Y. Amit).
- In my opinion, there is a solid basis for the determination that an examination of the parameters proposed in the Barnea case shows that the non-compete agreement to which Kahane entered into does not amount to "cutting down the tree": although the geographical application of the limitation in the non-compete agreement is broad, the non-compete restriction relates only to the field of activity of the electron microscope market (and not to Kahane's entire use of his human capital).
At the same time, the limitation in the non-competition clause is also limited to three years only. In a normal situation, a restriction for such a period of time is not a limitation "Cutting down the tree", and not even within the fence "Pruning the branch" unable to return and"Grow Fruit". Depending on the example of the tree and the fruits, this is a restriction on the production of fruits for a number of "Seasons", after which the worker will be able to return and pick the fruit of the tree (See, for example: Civil Appeal 1839/19 Kfar Saba Tax Assessor' Reisman, paragraphs 14-18 of the judge's opinion 3 Read (14.6.2021), which determined that the limitation of non-competition that is the subject of the proceeding there, for a period of four years, does not amount to "Cutting down the tree" (Through the judge's reasoning א' שטיין and of my colleague the judge v. Solberg in the same matter it differed and did not include a reference to this issue); and also the matter of Gangina in which it was determined that the limitation of non-competition that is the subject of the proceeding there, for a period of three years, does not amount to "Cutting down the tree").