Non-Compete Clause in Romania

Under the Romanian Labour Code (Codul muncii, Law no. 53/2003), a non-compete clause (clauza de neconcurență) binds you only if the contract names banned activities, monthly allowance, duration, third parties and geographic area (art. 21(2)), pays at least 50% of your average gross salary of the last 6 months (art. 21(3)) and lasts at most 2 years (art. 22(1)).

What is a non-compete clause under the Romanian Labour Code?

Besides the essential clauses, the parties may negotiate specific clauses, and the non-compete clause is one of them (art. 20(2)(b)). It obliges you, after the contract ends, not to perform, on your own account or for a third party, an activity that competes with the one you performed for your employer, in exchange for a monthly non-compete allowance (indemnizație de neconcurență) that the employer pays throughout the non-compete period (art. 21(1)). It can be agreed when the contract is signed or during the employment (art. 21(1)).

The clause is about the period after termination. While you are employed, your loyalty is already covered by the duty of fidelity towards the employer (art. 39(2)(d)).

What must the clause contain to be valid?

The clause produces effects only if the contract sets out concretely (art. 21(2)):

• the activities you are prohibited from performing at the date the contract ends;
• the amount of the monthly non-compete allowance;
• the period during which the clause applies;
• the third parties for whom you may not perform the activity;
• the geographic area in which you would be in real competition with the employer.

Missing one element is enough for the clause to fail. “Any competitor, anywhere, for two years” is not a non-compete clause under Romanian law.

How much is the non-compete allowance?

The monthly allowance is not salary, is negotiated between the parties and cannot be below 50% of the average of your gross salary income in the 6 months before the contract ended, or, if the contract lasted less than 6 months, of your average monthly gross income over the contract (art. 21(3)). It is a deductible expense for the employer and taxable income for you (art. 21(4)).

If the employer stops paying, the clause has lost its consideration. You can claim the unpaid allowance in court within the general 3-year term (art. 268(2)) and, depending on your plans, argue that the restriction no longer binds you. Keep the payment history; it is the first thing I ask for.

How long can a non-compete clause last?

At most 2 years from the date the contract ends (art. 22(1)). The post-termination restriction does not apply at all in two situations (art. 22(2)): when the contract ended by operation of law, except the cases in art. 56(1)(c), (e), (f), (g) and (i), and when the contract was terminated at the employer’s initiative for reasons not related to your person. In plain terms: if you were made redundant, the non-compete does not follow you. See redundancy in Romania.

What makes a non-compete clause unenforceable?

Any clause granting less than the legal minimum is caught by art. 11, and you cannot validly waive these protections (art. 38).

What happens if I breach the clause?

If you breach a valid clause through your own fault, you may be ordered to return the allowance and, where the employer proves a loss, to pay damages corresponding to that loss (art. 24). The employer must prove both the breach and the damage. Threats of automatic “penalties” written into the clause do not change this: a clause fixing the damage in advance is prohibited (High Court decision no. 19/2019).

Confidentiality and mobility clauses in brief

• Confidentiality clause (clauza de confidențialitate): both parties agree not to pass on data or information learned during the contract, during the employment and after it, under the conditions set in the internal regulation, the collective agreement or the contract (art. 26(1)). A breach leads to damages (art. 26(2)). The Code sets no time limit and no allowance for it, so read how the protected information is defined. A separate confidentiality agreement may cover information received before signing (art. 17(7)).
• Mobility clause (clauza de mobilitate): the parties agree that, because of the nature of the work, you do not work in a fixed place; in exchange you are entitled to additional benefits in money or in kind, which must be specified in the contract (art. 25). A mobility clause without a specified benefit is incomplete.
• Training clause: if the employer paid for a course and you signed an addendum committing to stay, leaving early means repaying the costs in proportion to the unworked period (art. 198). Details on the resignation page.

What should I do before signing, or when a former employer threatens me?

1. Before signing, check the five elements of art. 21(2), the allowance figure against 50% of your gross pay, the duration and the area. If the clause covers your whole profession, say so and ask for it to be narrowed (art. 23(1)).
2. After termination, check how the contract ended. Redundancy or termination by law means the clause does not apply (art. 22(2)).
3. Check whether the allowance is actually being paid every month (art. 21(1)).
4. If you receive a warning letter, ask for the clause text and the payment proof before answering anything. Do not admit a breach in writing.
5. Send me the contract and the letter: I tell you whether the clause binds you and, if it is too broad, I ask the court to reduce its effects (art. 23(2)). The other contract clauses are covered on the employment contract page and the overview on my employment law page. Contact me before you sign anything new.

Consolidated text of the law: Codul muncii, Legea nr. 53/2003 (legislatie.just.ro).