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Obligation of an employee and a former employee to refrain from activities harmful to the employer, prohibition to conduct a competitive business in Poland - part one.

Pursuant to the provisions of Article 100 § 2 point 4-6 of the Polish Labour Code, an employee in Poland is obliged in particular:

- take care of the welfare of the workplace, protect its property and keep secret information, the disclosure of which could expose the employer to damage;

- observe the secrecy specified in separate regulations;

- observe the principles of social coexistence in the workplace.

Thus, the employee is bound by the general principle of loyalty to the employer and protection of his interests.


Competitive activity of the employee during the employment relationship.

Pursuant to the provisions of Article 1011 § 1 of the Polish Labour Code, within the scope specified in a separate agreement, an employee may not conduct any activity competitive to the employer, or provide work within the employment relationship or on any other basis for the benefit of an entity conducting such activity (non-competition clause).

Considering the above, it should be assumed that, as a rule, an employee may conduct activities competitive to the employer. A non-competition clause applies only if a written non-competition agreement has been concluded. Therefore, an employer who would not like his employees to conduct competitive activity during their employment should sign a relevant agreement with them in this respect. Such an agreement should be properly constructed, inter alia, so that there is no doubt what activity is competitive and must be concluded in writing under pain of nullity. Additionally, such an agreement must be performed, i.e. the employer may not allow for running a competitive business. The Polish Supreme Court noted the above in its decision of 21 May 2014, ref. no. I PK 27/14 "Termination of employment contract (art. 45 § 1 KP) was unjustified and violated the principles of social coexistence (art. 8 KP), when, generally speaking, the employer allowed and tolerated the performance of medical work by rescuers in competitive entities (and sometimes even required it), and then, facing the need to reduce employment (no need for medical rescuers), used it as a reason for termination of employment relationship with the employee by notice, citing the non-competition agreement.”

 However, one should also remember about the principle of caring for the interests of the employer. According to the Polish Supreme Court judgment of 20 August 2009, II PK 41/09 "The determination of the scope of employee obligations is not the same as the conclusion of a separate non-competition agreement. Conducting competitive activity despite not concluding a non-competition agreement may violate the obligation to take care of the welfare of the workplace as defined in Article 100 § 2 point 4 of the Labour Code and constitute a justified reason for termination of the employment contract, or even a reason for immediate termination.” Thus, despite the fact that the parties do not have a non-competition agreement, an employee must observe general principles towards his employer, such as loyalty, honesty and taking care of his interests. Otherwise, the employee may be dismissed, and even the employer may claim compensation from the employee.

During the employment relationship, a provision enabling an employee to be held liable for damages may be a provision of Articles 114 and 122 of the Labour Code, according to which an employee who, as a result of non-performance or improper performance of employee obligations caused damage to the employer through his fault, is liable for material liability according to the principles set out in this chapter, if the employee intentionally caused damage, is obliged to repair it in its full amount. Thus, for example, intentional causing damage to the employer by persuading his customers - during the employment relationship - to move to a competitive company run by an employee may be associated with liability for damages.


Read more in part two.


Ewa Kosowska-Czapla

Legal Adviser / Restructuring Adviser

Szczecin, 6.06.2019.