7.1 What types of restrictive covenants are recognised?
Restrictive covenants such as non-compete and non-solicitation clauses are not regulated by Maltese law. The recognition of such clauses by Maltese courts is limited in nature and jurisprudence has held that such clauses may only be enforced if their applicability is proportional in nature.
7.2 When are restrictive covenants enforceable and for what period?
Restrictive covenants may be enforceable by Maltese courts if they are proportional in nature. Maltese jurisprudence has held that for restrictive covenants to be enforceable, such clauses must be reasonable and limited in nature, particularly with respect to their duration and the applicable market.
7.3 Do employees have to be provided with financial compensation in return for covenants?
Given that restrictive covenants are not regulated by Maltese law, employers are not obliged to provide financial compensation in return for such covenants. However, the offer of financial compensation will be taken into account by Maltese courts when determining the enforceability or otherwise of such clauses, particularly in light of their proportionality and reasonableness.
7.4 How are restrictive covenants enforced?
Since restrictive covenants are not regulated by Maltese law, their enforceability or otherwise is determined through judicial proceedings before the Maltese courts.
Av. Charlene Gauci
This article was first published in ICLG – Employment & Labour Law and may be accessed on the ICLG to Employment and Labour Law 2022 publication.
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