Finland Non-competition clauses in employment contracts NIR 2016 - Copenhagen Ella Mikkola

General principles of non-competition During the employment – on the basis of law Competing activities forbidden After the employment – requires agreement Employee may freely engage in competing activity unless there is an agreement on non-competition

Agreement on non-competition and employees Possible only if there is a "particularly weighty reason" - taking into account, inter alia the nature of employer's operations the need for protection related to keeping a business or trade secret or to special training given to the employee by the employer the employee's status and duties Maximum period 6 months (no compensation required) Note, however, that the maximum is 12 months if reasonable compensation is paid for the non-competition Non-hire and non-solicitation not regulated in law

Example – contractual provision "The director undertakes, during the term of this Agreement for a period of six (6) months after the termination of the Agreement, not to prepare for competing actions or compete with the Company to the benefit of him/herself or a third party and not to take a position with a company competing with the Company, and not to otherwise in any other way support or contribute to in any capacity, such activities, which even in part compete with the activities of the Company."

Trade Secrets Confidentiality often agreed in employment contracts However, in Finland it is a crime to utilise business secrets until two years have passed after the expiry of the employment Note: this does not require any agreement on confidentiality

Supreme Court (KKO 2014:50) A robotics company Employee was a programmer (programming robots) Non-competition of 4 months agreed Court: a "particularly weighty reason" not present because Non-disclosure agreement between the parties Court referred to the potential criminal liability as well Employee did not have any subordinates Employee did not participate in the sales activities

Ella Mikkola Partner, Attorney-at-Law Head of Intellectual Property (Finland) Tel. +358 40 585 3566 ella.mikkola@twobirds.com Bird & Bird is an international legal practice comprising Bird & Bird LLP and its affiliated businesses: www.twobirds.com

Act on Employee Inventions - Section 8 Where an application for a patent is filed during the six months following the termination of the employment […] the invention shall be deemed to have been made during the period of employment unless the inventor can give probable reasons why the invention had been made after the employment had terminated. Any agreement between an employer and an employee that limits the employee’s right to dispose of an invention made more than one year after the termination of the employment shall be void.