Non-Compete Agreements in Belarus
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Non-Compete Agreements in Belarus
Non-compete agreements – NCA – are a relatively new legal instrument in Belarus. They were introduced by Presidential Decree No. 8 of 21 December 2017 on the Development of the Digital Economy as a legal experiment within the Hi-Tech Park. The experiment has been running since 2018 and non-compete agreements are now a standard tool for HTP resident companies protecting their competitive advantage.
The critical constraint that every HTP company and their employees need to understand: non-compete agreements in Belarus are only available to HTP resident companies and their employees. A company that is not a resident of the HTP cannot conclude an enforceable non-compete agreement under Belarusian law. An NCA signed with a non-HTP employer has no legal force – it cannot be enforced.
For HTP companies, the NCA is a powerful tool when correctly drafted. When incorrectly drafted – particularly around compensation – it creates disputes and unenforceable restrictions.
What a Non-Compete Agreement Restricts
Under Belarusian law, a non-compete agreement is an agreement by which an employee voluntarily accepts – in exchange for agreed compensation – the following restrictions for a defined period after leaving the company.
Not to conclude employment contracts or civil contracts with the employer’s competitors.
Not to carry out competing entrepreneurial activity independently – as an individual entrepreneur.
Not to act as a founder or participant of a company that is a competitor of the employer.
Not to perform the functions of a director of a competing company or become a member of its collegial management body.
These restrictions are specific and defined by law. An NCA that attempts to impose broader restrictions – for example, restrictions on working in the industry generally rather than specifically with competitors – may not be enforceable to the extent it goes beyond what the law permits.
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Compensation – The Most Important Provision
The compensation requirement is where most NCA disputes in Belarus arise. The employer is required to pay the employee compensation for accepting the non-compete restrictions. The compensation must be paid both during the employment and after its termination.
Minimum compensation during employment: The law does not specify a minimum for the in-employment period – but the NCA must provide for some compensation during the employment relationship. In practice, most NCA agreements provide for a monthly payment during employment.
Minimum compensation after termination: At least one third of the employee’s average monthly salary for the last year of employment – calculated on a monthly basis – for the duration of the post-employment restriction period. If the post-employment restriction is for one year, the employer must pay at least one-third of the average monthly salary every month for twelve months after termination.
This is a mandatory minimum. The parties can agree a higher amount – and in practice, for senior employees whose NCA restrictions are most valuable, higher compensation is common.
If the employer stops paying compensation after termination – even if the employee is complying with the restrictions – the employee is released from the non-compete obligations. The employer’s payment obligation runs for the full restriction period regardless of whether the employee is actually working for a competitor.
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FAQ
No. Non-compete agreements under Belarusian law are only available to HTP resident companies. A non-compete agreement signed with a non-HTP employer has no legal force and cannot be enforced. Companies that are not HTP residents can use commercial secrecy agreements – but not NCAs.
One year after the termination of employment. Restrictions for a longer period are not enforceable for the excess period.
After termination, the employer must pay at least one-third of the employee’s average monthly salary for the last year of employment – monthly – for the duration of the restriction period. During employment, the NCA must also provide for compensation, but the law does not specify a minimum for the in-employment period.
The employee is released from the non-compete obligations. The employer cannot enforce the restrictions while failing to pay the compensation. We advise employees in this situation on confirming their release and recovering unpaid amounts.
No. The restrictions permitted under Belarusian law are specific – working for competitors, running a competing business, founding or managing a competing company. Restrictions on working in the industry generally are not permitted and would be unenforceable.
An NCA is typically a separate agreement – concluded alongside the employment contract or kontrakt. It can also be included as a section of the main contract, but a standalone document is clearer and easier to manage when the employment relationship ends and the civil law obligations begin.