With the termination of the employment contract, the responsibilities of the parties arising from the contract are also terminated. The information that the worker learns during his/her work may harm the rightful interests of the employer after the employment contract ends. For this reason, the employer may prevent the employee from working with a rival employer or in a rival enterprise established by the employee. This situation is called prohibition of competition. The prohibition of competition is regulated in Turkish Code of Obligations (TCO) art. 444/1. In order to establish a non-competition agreement, there must first be an existing employment contract. In the decision of the 11th Civil Chamber of the Court of Cassation, it is stated that "the non-competition contract was signed before the employment contract between the parties, there should be an existing labour contract between the parties in order to be able to speak of a valid non-competition contract in accordance with article 444 of the TCO, the prohibition of competition signed between the parties without a labour contract. The court said that the contract regarding the issue is false.” ( Case No: 2018/400, Decision No: 2019/5585)
Article 48 of the Constitution regulates the freedom of work and contract. In article 444 of the Code of Obligations and the following articles, a balance has been tried to be established between the prohibition of competition and the freedom of employment and contract. In case of doubt in the provisions of the contract regarding the prohibition of competition, a decision is made in favor of the employee. “Although they are free to determine the subject of the convention, it cannot be said that this freedom is unlimited and infinite. When the contract clauses concerning prohibition of competition, restrictions imposed for workers is in violation of the freedom of the principles guaranteed by the Constitution of Turkey, the parties to make any arrangements would mean violation of this freedom with a contract clause to be signed between them are invalid due to the absence possible. " (Court of Cassation 11. Civil Chamber Case No: 2019/2050, Decision No: 2020/5916 )
In order for the contract on the prohibition of competition to be considered valid, it must be made in writing. By the 11th Civil Chamber of the Court of Cassation; “By the court; It has been decided to dismiss the case on the grounds that the non-competition debt arises only if the parties of the employment contract have explicitly agreed, and that the prohibition of competition has been made in an ordinary written form is a validity condition, and that there is no record regarding the prohibition of competition in the indefinite-term employment contract between the parties.” ( Case No:2017/2636, Decision No: 2019/124 )
If the conditions of the prohibition of competition are mentioned, first of all the employer should have a justified interest worth protecting. The worker must have the customer environment or production secrets and their use must be of a nature that will cause a significant damage to the employer. The 11th Civil Chamber of the Court of Cassation decided to “The prohibition of competition agreement is invalid on the grounds that the defendants signed the unfair competition agreement under difficult conditions, that there is no proportionate action, and it cannot be determined that the transfer of information or secrets that will create unfair competition is not possible.” (Case No:2017/745, Decision No:2018/6432) The economic future of the worker should not be endangered. The prohibition of competition cannot exceed two years, except for special circumstances and conditions, pursuant to TCO art 445/1. A prohibition of competition may be imposed on jobs directly related to the work of the employee in the enterprise. According to the decision of the Court of Cassation in this direction, "It should be determined clearly which or which works of the employer the prohibition of competition is restricted." (9 Civil Chamber 24.12.2009, 26954/36971)
Article 446/1 of the Code of Obligations regulated what would happen as a result of the act contrary to the prohibition of competition. Accordingly, if the employee acts contrary to this, he is obliged to compensate the damages incurred by the employer. The second paragraph of the same article provides the opportunity for the worker to get rid of his/her debt related to the prohibition of competition by paying the amount decided as a penal clause. If the act contrary to the prohibition is subject to a penalty condition, the worker can avoid being subject to the prohibition of competition by paying this amount.