Non-compete agreement or “acordo de não concorrência” in Portuguese, is a legal document that restricts an ex-employee’s ability to work or start a similar business in the same field as their former employer.

The purpose of a non-compete agreement is to protect the interests of the employer by preventing their former employees from exploiting the confidential information, trade secrets, and customer relationships that they gained while working for the company.

In Brazil, non-compete agreements are regulated by article 444 of the Consolidation of Labor Laws (CLT) and must be in writing and signed by both parties. The agreement must be specific and reasonable, defining the duration, scope, and geographic coverage of the restrictions.

Non-compete agreements can be agreed upon at the beginning of the employment contract, during the employment period, or at the end of it. However, the agreement must have a compensation clause, which means the employee must receive adequate payment for the duration of the restriction.

The duration of a non-compete agreement should be reasonable and proportionate to the level of confidentiality of the information obtained by the employee. If the duration exceeds what is reasonable, the agreement may be considered null and void.

The scope of the non-compete agreement must be limited to the same or similar activity as the former employer’s business. If the agreement contains too broad of a scope, it can be considered abusive and also null and void.

The geographical coverage of the non-compete agreement must also be reasonable and limited to the geographical region where the former employer operates. If the coverage is too broad, it can be considered void for being too restrictive.

In conclusion, non-compete agreements are an important legal tool for companies to protect their confidential information and business relationships. However, they must be specific, reasonable, and proportionate to the employer’s business needs. Therefore, it is important to seek professional legal advice when drafting a non-compete agreement.