An employment agreement contained a prohibition in the field for a year, and that the employee will transfer to the employer any trade secrets, including customer lists he may have.
The Labor Court held that a non-compete clause need be reasonable and meant to protect the interests of both parties. A non-compete clause will be upheld only if it protects a “legitimate interest” of the employer as to the existence of any trade secret, and when the employee received a special payment for the agreement not to compete with the current employer. Protection of a legitimate interest does not mean prevention of any future competition, and shown that this was the intent of the employer, the clause will not be upheld. The Court also noted that a list of customers could be treated as a trade secret but only in a case where it has added value such as details of the terms of engagement with the customers. However, in the current dynamic market, the value of “old” information concerning the terms and conditions of engagement and customer names quickly becomes invaluable. Because in that case there was no legitimate interests to protect and the costumer list was not really a trade secret the Court dismissed the claim.