The non-compete clause, being a restrictive covenant which is usually included in employment contracts, is not regulated by Maltese Law. Hence, the enforceability or otherwise shall be determined through judicial proceedings before the Maltese Courts.

Recently, the Court of Appeal in Malta in Cutrico Services Ltd v. Josef Penza shed some light on the 'non-compete' clause or, in simpler terms, the clause prohibiting ex-employees from soliciting, interfering or endeavouring to entice a customer away from the employee's ex-employer's business. A clause/restrictive covenant which is debatable for its enforceability or rather, lack of, before the relevant courts.

According to Maltese case-law¹, for a 'non-compete' clause to be upheld it must:

1. be in writing;
2. be certain in terms object, time and place;
3. include a compensation for compliance with such clause; and
4. reasonable and hence only limited to strictly protect the employer's interests.

Within the above-mentioned interpretation, the Court held that such aforementioned clause shall not be considered null and void in its entirety but only in relation to clients which an ex-employee did not service/dealt with during his employment with his ex-employer. This interpretation was in clear contradiction to the interpretation given by the First Hall of the Civil Court which declared the clause as null and void in its entirety.² The appellate Court also determined that the period of two years included within the restrictive covenant...

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