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A Restrictive Covenant Agreement protects businesses by legally limiting what employees can do after leaving their job. Under Austrian labor law, these contracts typically restrict former employees from competing with their ex-employer, poaching clients, or sharing confidential information for a specific time period.

Austrian courts enforce these agreements only when they're reasonably limited in scope, duration (usually max 1 year), and geographic area. The restrictions must protect legitimate business interests while allowing former employees to earn a living. Companies often need to provide compensation during the restriction period for the agreement to be valid.

Use a Restrictive Covenant Agreement when hiring employees who will access sensitive business information or develop close relationships with your clients. These agreements are especially important for sales roles, technical positions, and senior management in Austria's competitive business sectors like technology, consulting, and manufacturing.

The right time to implement these agreements is during the initial hiring process or promotion discussions. Austrian law requires careful timing - introducing restrictions after employment starts can be problematic. Consider using them when expanding into new markets, launching innovative products, or protecting valuable client relationships that could be at risk if key employees leave.

• Non-compete clauses: Prevent employees from working for competitors or starting competing businesses, usually limited to 1 year in Austria
• Non-solicitation provisions: Stop former employees from approaching your clients or poaching staff
• Confidentiality agreements: Protect trade secrets and sensitive business information indefinitely
• Garden leave clauses: Keep employees on payroll but away from work during notice periods
• Training repayment agreements: Require employees to reimburse training costs if they leave within a specified period

• Employers: Austrian companies draft and enforce these agreements to protect business interests, often through their HR or legal departments
• Senior Executives: Commonly bound by comprehensive Restrictive Covenant Agreements due to their access to strategic information
• Sales Representatives: Often sign these agreements to protect client relationships and market intelligence
• Legal Counsel: Draft and review agreements to ensure compliance with Austrian labor law and enforceability
• Works Councils: May need to be consulted when implementing restrictive covenants affecting multiple employees

• Scope Definition: Identify specific business interests needing protection - client lists, trade secrets, or specialized knowledge
• Duration Planning: Determine reasonable time limits for restrictions, typically maximum 1 year under Austrian law
• Geographic Boundaries: Map out specific regions where restrictions apply, ensuring they match business operations
• Compensation Details: Calculate appropriate compensation during the restriction period (mandatory in Austria)
• Role Assessment: Document employee's position, access to sensitive information, and client relationships
• Legal Compliance: Use our platform to generate an Austrian-compliant agreement that includes all required elements

• Party Details: Full legal names and addresses of employer and employee, plus roles and responsibilities
• Scope Definition: Clear description of restricted activities and protected business interests
• Time Limits: Specific duration of restrictions, not exceeding one year under Austrian law
• Geographic Range: Precise definition of territorial limitations matching business operations
• Compensation Terms: Detailed compensation structure during the restriction period
• Consequences: Clear penalties for breach, including contractual penalties where permitted
• Severability Clause: Ensures partial validity if specific provisions are found unenforceable

A Restrictive Covenant Agreement differs significantly from a Confidentiality Agreement in several key aspects, though both protect business interests. Understanding these differences helps you choose the right tool for your situation under Austrian law.

• Scope of Protection: Restrictive covenants cover multiple aspects including non-compete, client non-solicitation, and confidentiality, while Confidentiality Agreements focus solely on protecting sensitive information
• Duration: Restrictive covenants are typically limited to one year post-employment in Austria, while confidentiality obligations can extend indefinitely
• Compensation Requirements: Restrictive covenants require specific compensation during the restriction period; confidentiality agreements don't need additional compensation
• Legal Scrutiny: Courts examine restrictive covenants more strictly, particularly regarding geographic scope and duration, while confidentiality agreements face fewer enforceability challenges