In February's judgment (Case No. 27 Cdo 1236/2024), we delve into the abuse of a right concerning the termination of a non-compete clause. The case specifically examined the relationship between a board member and a joint-stock company, governed by an agreement on the performance of office. Under the agreement, the parties had agreed on a six-month non-compete clause with appropriate compensation for the board member. The agreement also included the company's right to withdraw from the non-compete clause no later than the expiry date of the board member's term of office.
The board member resigned from office, with his term ending nearly four months after his resignation. On the last day of his term, the company's statutory body also adopted a decision to withdraw from the non-compete clause, and the withdrawal notice was delivered to the board member on the same day.
The dispute cantered on the payment due under the non-compete clause, as the board member claimed the company's withdrawal was invalid. He referred to a Constitutional Court ruling that found withdrawal from a non-compete clause for specific reasons to be an abuse of a right (II. ÚS 1889/19). However, this ruling was made in the context of an employee-employer relationship, and the company argued the different status of a board member.
The Supreme Court has stated that there is no doubt that a business corporation can also abuse the right to withdraw from a non-compete clause against a member of its elected body; the fact that the member does not have the status of a weaker contractual party (employee) is legally irrelevant. An evident abuse of a right, inter alia, occurs when the conduct is not aimed at achieving the purpose and meaning pursued by the legal norm but is contrary to good morals, intending to harm another.
In this respect, the Supreme Court highlighted criteria from the ruling related to employment relationships, which could indicate an abuse of a right. These circumstances include:
➡ The timing of the withdrawal;
➡ Whether the withdrawal occurred just before the end of the employee's employment;
➡ Withdrawal without stating a reason; or
➡ Whether the employee had already accepted (or declined) a job offer in accordance with the non-compete clause.
According to the Supreme Court, the lower courts should have given more consideration to the fact that the withdrawal from the non-compete clause occurred as late as on the last day of the board member's term, despite the company knowing about the end of the term nearly four months in advance. Therefore, it cannot be ruled out that there might have been an abuse of a right. In interpreting the abuse of a right (and the timing of exercising the right in its assessment), the Supreme Court also borrowed conclusions from our colleague, Petra Pipková, presented in a commentary that she co-authored.
