Non-Competition Clauses

By means of a post-employment non-competition clause, the employer can prevent a departing employee from using, to the employer's detriment, the knowledge of its clientele and business secrets acquired while working for it. The legal basis is Articles 444 to 447 of the Turkish Code of Obligations No. 6098 (Türk Borçlar Kanunu, TBK). Since a non-competition clause restricts the employee's constitutionally guaranteed freedom to work and to choose a profession, it is subject to strict validity requirements and to limits as to subject matter, territory and duration, and it is interpreted narrowly by the courts.

Contents

• What is a post-employment non-competition clause?
• What applies to competition during the employment relationship?
• What requirements must a non-competition clause meet?
• What limits apply to a non-competition clause?
• Is a compensation payment (karşılık) mandatory?
• What are the consequences of a breach of a non-competition clause?
• In which cases does a non-competition clause lapse?
• How is an excessive non-competition clause dealt with?
• Which courts have jurisdiction and how is the clause enforced?
• Conclusion

What is a post-employment non-competition clause?

A post-employment non-competition clause (rekabet yasağı) is an agreement under which the employee undertakes, after the end of the employment relationship, to refrain from certain activities competing with the employer within defined limits as to subject matter, territory and duration. The prohibition covers establishing one's own competing business, working for a competitor, and entering into a partnership, consultancy or any other kind of interest relationship with a competing business. The agreement may be concluded in the employment contract, in an additional protocol or upon the termination of the relationship.

What applies to competition during the employment relationship?

Under Article 396 TBK, while the employment relationship continues, the employee may not, in breach of the duty of loyalty, perform services for a third party against remuneration and, in particular, may not compete with the employer; this obligation does not require a separate non-competition agreement to be concluded.

Depending on the seriousness of the breach and the circumstances of the specific case, immediate termination for just cause and claims for damages may be considered. Articles 444 et seq. TBK, by contrast, govern only the period after the end of the employment relationship; a non-competition clause for that period requires a written contractual basis.

What requirements must a non-competition clause meet?

Under Article 444 TBK, a post-employment non-competition clause is valid only if the following requirements are met cumulatively:

• The employee must have full capacity to act at the time the agreement is concluded.
• The agreement must be made in writing; an oral agreement is not sufficient.
• The employment relationship must give the employee the opportunity to obtain knowledge of the employer's clientele, manufacturing secrets or business activities.
• The use of this knowledge must be capable of causing significant damage to the employer.

These requirements must be substantiated for each employee: standard clauses addressed to all employees regardless of their duties and access to information carry a risk of invalidity. Validity depends not so much on the job title as on the employee's actual duties, the opportunity to obtain knowledge provided by those duties and the risk of significant damage to the employer if that knowledge were used. Although these requirements may be met more frequently in positions such as sales, senior management or R&D, the job title alone is not sufficient.

What limits apply to a non-competition clause?

Under Article 445 TBK, a non-competition clause must remain within appropriate limits as to subject matter, territory and duration and must not unfairly jeopardise the employee's economic future:

As to subject matter, the prohibition must be limited to competing activities connected with the work performed by the employee for the employer and the knowledge worthy of protection acquired by the employee. Publicly available information and the employee's general professional knowledge, skills and experience cannot be covered by the prohibition.

As to territory, the scope must be limited to the region in which the employer actually operates and in which the employee had an influence on customers or business processes. A prohibition covering the whole of Turkey can be defended only if the employer's activities and the employee's duties or sphere of influence extend nationwide and the prohibition nevertheless remains proportionate.

As to duration, the prohibition starts to run upon the end of the employment relationship and, save in special situations and circumstances, may not exceed two years. Where a shorter period is sufficient, having regard to the knowledge and customer relationships to be protected, the prohibition must be kept correspondingly narrow.

Is a compensation payment (karşılık) mandatory?

The Turkish Code of Obligations does not make the validity of a non-competition clause conditional on a compensation payment; a prohibition without any consideration may, as a rule, be valid. Nevertheless, when limiting an excessive prohibition under Article 445(2) TBK, the judge takes equitable account of any consideration the employer may have undertaken to provide. Consideration may therefore be a factor in the employer's favour in the proportionality assessment, particularly in the case of broader restrictions; however, it does not cure the absence of the fundamental validity requirements under Article 444 TBK.

What are the consequences of a breach of a non-competition clause?

If the employee breaches a valid non-competition clause, he or she is obliged under Article 446 TBK to compensate the employer for the damage suffered as a result. Since it is often difficult to prove the specific damage, a contractual penalty (ceza koşulu) is frequently agreed in practice. Where a contractual penalty has been agreed and the contract does not provide otherwise, the employee may release himself or herself from the non-competition obligation by paying the stipulated amount; the employer's right to claim damage exceeding the amount of the penalty is preserved. The employer may demand that the conduct in breach of the prohibition be stopped only if it has expressly reserved this right in writing in the contract and if the importance of the interests infringed or threatened and the employee's conduct justify it. Under Article 182(3) TBK, the judge reduces of his or her own motion a contractual penalty considered excessive; moreover, if the underlying non-competition clause is invalid, the contractual penalty attached to it cannot be enforced either.

In which cases does a non-competition clause lapse?

Under Article 447 TBK, a non-competition clause lapses if it is established that the employer no longer has a genuine interest in maintaining it (for example, if the relevant field of activity has been abandoned). The prohibition also lapses if the employer terminates the contract without the employee having given a justified reason, or if the employee terminates the contract for a reason attributable to the employer. Consequently, in the case of terminations based on operational requirements of the workplace or the business that do not stem from the employee, and in the case of terminations by the employee for a reason attributable to the employer, such as non-payment of wages, the employer cannot, as a rule, rely on the non-competition clause. The manner of and the reason for termination must also be assessed separately in the specific case.

How is an excessive non-competition clause dealt with?

The mere fact that a non-competition clause is excessive as to subject matter, territory or duration does not mean that the clause is automatically void in its entirety. Taking into account all the circumstances and, in particular, any consideration the employer may have undertaken to provide, the judge may reduce an excessive prohibition to an equitable extent in terms of its scope or duration. However, the absence of the fundamental validity requirements under Article 444 TBK cannot be remedied by judicial intervention. Proportionality should therefore be exercised at the drafting stage: an appropriate clause from the outset avoids litigation risks and is more persuasive vis-à-vis the employee than a clearly exaggerated prohibition.

Which courts have jurisdiction and how is the clause enforced?

According to the decision of the Grand General Assembly for the Unification of Judgments of the Court of Cassation dated 13 June 2025, the commercial courts of first instance (asliye ticaret mahkemeleri) have jurisdiction over actions brought for breach of a non-competition clause within the scope of Articles 444 to 447 TBK. The Assembly based this conclusion on the reasoning that such actions are to be regarded as absolute commercial cases under Article 4(1)(c) of the Turkish Commercial Code (TTK).

In these disputes, the provisions on mandatory pre-action mediation applicable to commercial disputes, rather than those specific to labour disputes, must be taken into account. Under Article 5/A TTK, recourse to mediation before filing an action is a precondition for actions concerning monetary claims, compensation, annulment of objection (itirazın iptali), negative declaratory relief and restitution.

In order to prove a breach, the employer should document from the outset facts such as the employee's new position, the field of activity of the competing business, customer contacts and the use of protected information. Where the right to demand cessation (injunctive relief) has been expressly reserved in the contract and the requirements of Article 446(3) TBK are met, an interim injunction may also be sought in urgent cases; an interim injunction is not granted automatically.

The duty of confidentiality is independent of the non-competition clause; under Article 396(4) TBK, this duty continues after the end of the employment relationship to the extent necessary to protect the employer's legitimate interest. In this context, a confidentiality clause should exclude publicly available information, the employee's general professional knowledge and experience, and information that no longer qualifies as a secret.

Conclusion

A post-employment non-competition clause is an effective instrument for protecting customer relationships and business secrets; to that end, however, it must be agreed in writing, limited to employees who actually have access to information worthy of protection, restricted as to subject matter, territory and duration, and accompanied by a proportionate contractual penalty and a written, express clause on the right to demand cessation (injunctive relief).

It should be borne in mind that the manner in which the employment relationship ends may determine whether the prohibition continues and that excessive clauses may be limited by the judge. Employers should review their standard clauses regularly, and employees should have the scope of existing prohibitions legally assessed before taking up a new position.

GEMS Schindhelm advises employers and employees on the drafting, review and enforcement of non-competition, confidentiality and contractual penalty clauses, as well as on asserting and defending such claims in litigation. This article is intended for general information purposes only and does not constitute a legal opinion or legal advice; each dispute must be assessed separately in light of the specific circumstances of the case and the legislation in force.