Non-compete agreements in Lithuanian labor law

ENThe research focuses on the experience of non-compete agreements, their application and legal regulation in Lithuania, as well as explores several aspects characteristic of the legal regulation of Lithuanian noncompete agreements. Firstly, when non-compete agreements were first of all encountered in practice, there was legal vacuum in Lithuania—neither labor law nor civil law regulated such agreements. Efforts were made to deal with this problem through case law. The guiding principle developed by the case law was that such agreements were to be treated as civil contracts and governed only by the rules of the Civil Code of Lithuania. Secondly, with the development of the case law, the courts admitted that the rules and general principles of civil law were inadequate on their own in order to assess the validity aspects of non-compete agreements. Besides, such case law was considerably criticized by the majority of the representatives of the Lithuanian labor law doctrine. A major turning point in the area of non-compete agreements was the adoption of the new Labor Code of Lithuania. This particular legal instrument opened the avenues for a new development of these agreements—setting aside the previous case law, such agreements were recognized as the subject-matter of labor relations expressis verbis to be regulated exclusively by labor law provisions. Hence, Lithuania reaffirmed its determination to treat non-compete agreements as subject to the exclusive regulation of labor law and, at the same time, laid down the principle imperative terms and conditions of non-compete agreements. Such regulation indicates that the law-maker has taken into consideration the fact the weaker link in the relationship is the employee who does not have the same negotiating power as the employer.An assessment of the present regulation of non-compete agreements within the context of other institutes of labor law leaves room for questioning the expediency of such agreements, in particular, considering the fact that their legal regulation is not adequately detailed. As discussed in the preceding sections, the Labor Code of Lithuania lays down additional agreement forms, which enable employers to protect their business interests—an agreement for the reimbursement of training expenses and a non-disclosure agreement. It is understandable that an employee has his/her own goals after the end of employment relations with an employee—to secure an extra layer of business protection and prevent potential additional competition from the side of the former employee. This raises the question whether the non-compete agreement is the right instrument and whether the employer can use other instruments available in the Lithuanian labor law to achieve the same goal without restricting the employee’s right to choose a job. [Extract, p. 203-204]