A Protective Covenant Agreement is essential for protecting an organization's confidential information, trade secrets, and business relationships in the German market. This document is typically used when onboarding key employees or during significant role transitions where employees gain access to sensitive information or strategic relationships. The agreement must comply with strict German legal requirements, including mandatory compensation for post-contractual non-compete obligations (Karenzentschädigung) and reasonable limitations on scope and duration of restrictions. The document addresses both during-employment and post-employment obligations, incorporating provisions from the German Commercial Code (HGB), Civil Code (BGB), and Trade Secret Act (GeschGehG). It's particularly crucial for roles involving access to trade secrets, strategic information, or key customer relationships.
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1. Parties: Identification of the contracting parties (typically employer and employee/contractor)
2. Background: Context of the agreement, relationship between parties, and legitimate business interests requiring protection
3. Definitions: Detailed definitions of key terms including Confidential Information, Trade Secrets, Competitive Activity, and Protected Business
4. Scope of Protection: Details of what information and interests are protected under the agreement
5. Confidentiality Obligations: Specific duties regarding handling and protection of confidential information
6. Non-Competition Provisions: Post-employment competition restrictions, including geographic and temporal limitations (must comply with § 74 HGB)
7. Non-Solicitation Provisions: Restrictions on soliciting employees, customers, or suppliers
8. Duration and Geographic Scope: Specific timeframes and geographical boundaries for restrictions
9. Compensation: Compensation for post-contractual restrictions as required by German law (typically 50% of last received remuneration)
10. Return of Materials: Obligations regarding return of confidential materials and company property
11. Breach and Remedies: Consequences of breach, including penalties and enforcement mechanisms
12. Severability: Provisions for maintaining validity if certain clauses are found unenforceable
13. Governing Law and Jurisdiction: Specification of German law application and competent courts
1. Garden Leave: Provisions for paid leave during notice period - include when dealing with senior executives
2. Technical Information Protection: Specific provisions for protecting technical know-how - include for technical roles or R&D positions
3. International Scope: Additional provisions for international protection - include when business operates across borders
4. Training Investment Protection: Provisions protecting company investment in employee training - include when significant training is provided
5. Digital Asset Protection: Specific provisions for digital assets and online presence - include for digital-focused roles
6. Client Relationship Protection: Detailed provisions for protecting client relationships - include for client-facing roles
1. Schedule 1: Protected Information: Detailed list of specific confidential information and trade secrets covered
2. Schedule 2: Restricted Territory: Detailed definition and maps of geographical restrictions
3. Schedule 3: Key Customers and Suppliers: List of specific customers and suppliers covered by non-solicitation provisions
4. Schedule 4: Compensation Calculation: Detailed breakdown of compensation for post-contractual restrictions
5. Appendix A: Confidentiality Procedures: Specific procedures for handling confidential information
6. Appendix B: Notification Requirements: Detailed procedures for required notifications regarding new employment
Find the exact document you need
Protective Covenant Agreement
A German law-governed agreement establishing post-employment restrictions and confidentiality obligations, including mandatory compensation provisions under German commercial law.
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Employee Covenant Agreement
A German law-governed agreement establishing employee obligations regarding confidentiality, IP rights, and non-compete provisions, with mandatory compensation requirements.
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