Non-compete agreements: actual problems of Ukrainian legislation

Abstract

This article is devoted to the study of non­competition agreements (prohibition of competition) in Ukrainian legislation, their legal regulation. This mechanism is used to regulate the relationship between the employer and the employee in order to protect the legitimate interests of the employer. The most common scientific approaches used to determine the legal nature of non-competition agreements in the legal doctrine, and they are evaluated. The authors established that, in essence, non-competition agreements are obligations with a negative content, despite that they are not provided for by the Civil Code of Ukraine.
 The article analyzes the legislation of Western countries concerning non-compete agreements, in particular France, Italy and the USA. The authors came to the conclusion that the provisions of the legislation of these countries are similar and establish the following requirements for contracts of this type: 1) to be in writing; 2) remuneration for the employee; 3) the duration of the obligation which is mainly in several years, the applicable territory and activities that are prohibited to perform. If one of the conditions is missing, then this is the basis for declaring an agreement invalid.
 Ukrainian legislation was analyzed, in particular the Law of Ukraine "On stimulating the Development of Digital Economy in Ukraine”, which provides for the concluding of non-compete agreements of Diya City residents. The authors came to the conclusion that, in general, Ukrainian labor legislation and civil legislation do not allow the conclusion of non­competition agreements, expect those provided for by the specified Law, because they violate human rights to work and entrepreneurial activity, and there are no laws that can limit these rights.
 An analysis of judicial practice is carried out, which is diametrically opposite, to some extent contradictory, because it is at the stage of formation. Since non-competition agreements exist in practice, the authors come to the conclusion that this topic is subject to further research.