A former employee, a VP of services with over 30 years of expertise in the wireless sector, started a business after being terminated. The employer demanded that the non-compete clause of the employment agreement be enforced and that the former employee be prevented from contacting its customers and competing with it, until a verdict is issued in the legal proceedings between the parties.
The Court rejected the motion for a temporary injunction and held that there is no justification for restricting the employee's freedom of occupation. The right to freedom of occupation is a fundamental right. A contractual provision that restricts freedom of occupation will not be enforced unless it is reasonable and protects a "legitimate interest" of an employer, such as the existence of a protectable trade secret. 'Trade secret' is not a magical phrase and one must indicate, for example, software, a formula, a specific customer list, etc., that is considered a ‘secret’ and specify what reasonable measures were taken to ensure the preservation of the trade secret. An employee will be exempt from liability if the knowledge contained in the 'trade secret' came to it during its work and became part of its general professional skills. Here, the employer sought enforcement of a non-compete clause that restricts the employee’s occupation right for 3 years without defining what the trade secret is in a clear and explicit way, but only in general terms. The employee has special expertise in his field of practice even before he was employed (and even was the one who developed this field of practice under his former employer), while the potential customers in this field are extremely limited and well-known anyway. Because the business was in its infancy, restricting the employee's occupation would result in the complete cessation of his activity and he would be required to seek other employment outside his field of occupation. In addition, it could cause harm to third parties who receive services from him. Thus, the motion to restrict the employee's occupation by injection order is unreasonable and therefore denied.