Restrictive Covenants and IP: UK Practice vs Italian Non-Compete (Art. 2125) and Duty of Loyalty (Art. 2105)

UK employers rely on restrictive covenants that are free to include and tested in court only if they are reasonable. In Italy a non-compete is a separate, paid agreement with formal requirements set by statute. IP ownership also follows different rules. Here is what a UK company should adjust.

UK restrictive covenants  

In the UK, post-termination restrictions (non-compete, non-solicitation of clients and staff, non-dealing) are governed by the common law doctrine of restraint of trade. A covenant is enforceable only if it protects a legitimate business interest and goes no further than reasonably necessary. No payment is required, though garden leave is often set off against the restriction. The UK government has consulted on limiting or reforming non-compete clauses; no statutory limit is in force at the time of writing.

Italy: the duty of loyalty during employment  

Article 2105 of the civil code imposes a duty of loyalty on every employee while employed: they must not deal in competition with the employer, on their own or others’ behalf, nor disclose or use information about the business’s organisation and methods to its detriment. This applies automatically, without a clause, and its breach can justify dismissal. It ends when the employment ends, which is why a separate agreement is needed afterwards.

Italy: the non-compete agreement (art. 2125)  

Article 2125 of the civil code says a post-employment non-compete is void unless it:

• is in writing;
• provides consideration (a payment) for the employee;
• is limited in subject matter (the activities restricted), place and time.

The duration cannot exceed five years for managers (dirigenti) and three years for other employees; longer terms are reduced to these limits. Courts also require that the restriction does not prevent the employee from earning a living in their field, and that the payment is proportionate to the sacrifice. Payment can be made during employment or at the end, but payment structures that depend on the length of employment, or very low amounts, are often found inadequate.

Practical consequences:

• A UK-style “12 months worldwide, no payment” clause would be void in Italy.
• An option for the employer to withdraw the non-compete unilaterally at termination is generally invalid.
• Non-solicitation of clients is often treated like a non-compete and should meet the same requirements; non-solicitation of employees is treated more leniently but should still be drafted carefully.

Side by side  

Intellectual property  

Inventions. In the UK, section 39 of the Patents Act 1977 gives the employer inventions made in the normal course of duties. In Italy, article 64 of the Industrial Property Code (Legislative Decree 30/2005) gives the employer rights in inventions made in performing an employment contract where inventive activity is the object of the job and paid for. Where the invention is made in the course of employment but inventive activity is not specifically paid, the employer still owns it but the inventor is entitled to a fair award (equo premio) if a patent is obtained. The employer also has an option right over inventions in its field made outside these cases.

Copyright and software. In the UK, section 11(2) of the Copyright, Designs and Patents Act 1988 gives the employer copyright in works made in the course of employment. In Italy, Law 633/1941 (article 12-bis) gives the employer the economic rights to software and databases created by an employee in performing duties or following the employer’s instructions. Other works are less clear-cut, so an express assignment clause is still recommended.

Moral rights. Italian moral rights (to be named as author) cannot be waived in the way UK moral rights often are. Draft assignments with this in mind.

Confidentiality and monitoring  

A confidentiality clause supports the article 2105 duty and continues after employment. To detect leaks, UK employers may use monitoring under UK GDPR. In Italy, article 4 of the Workers’ Statute (Law 300/1970) restricts tools that allow remote monitoring of workers and requires proper information to staff before data from work devices can be used, including in disciplinary cases. Plan data-loss-prevention and logging tools with this in mind.

Enforcement in practice  

UK employers enforce covenants through injunctions in the High Court. In Italy, an employer can seek an urgent court order (under article 700 of the civil procedure code) to stop a breach, and can claim damages or a penalty agreed in the clause. Courts check the clause’s validity first: if the payment is inadequate or the scope too wide, the clause falls entirely, and the employer may even have to accept that the payments already made were simply salary. Unfair competition rules and trade secrets law (protecting confidential know-how) also apply, independently of any contract, which matters when a former employee takes client lists or code.

Common mistakes UK employers make  

• Using a UK covenant pack without Italian payment, scope and duration terms.
• Paying a token amount that a court will consider inadequate.
• Restricting “any competing business worldwide” for a mid-level role.
• Relying on implied ownership of non-software creative work without an assignment clause.
• Rolling out monitoring software before informing employees under article 4.

What this means if you hire through an EOR  

The EOR is the legal employer, so the non-compete and IP clauses sit in its Italian contract. A good EOR set-up includes an assignment of IP to you as the client, a confidentiality clause and, where truly needed, a paid non-compete. Decide at offer stage whether you need a non-compete: it has a real cost, and a void clause gives no protection. Read our IP and confidentiality guide .

The bottom line  

Italian law protects employers well during employment through the duty of loyalty, and after it only through a paid, limited and written non-compete. Choose protections deliberately and pay for the ones you need.

Related guides for UK companies  

• Written statement vs Italian contract and CCNL
• Notice and PILON vs Italian notice
• Italy vs UK overview and Italian employment contracts

General information, not legal advice. Contact us to discuss protections for a senior hire, or estimate cost with the calculator .