A former bakery employee entered into lease agreements with the bakery owners, under which he undertook not to sell baked goods made by him in and around the local council premises for an extended period after the lease expired.
The court accepted the request and ruled that it was more appropriate for the tenant to sell baked goods since the contractual restriction contradicted public policy. The validity of a contractual obligation to restrict freedom of occupation will be examined by examining the competing interests and principles and defining the appropriate balance between them. While it may sometimes be possible to restrict freedom of occupation for the purpose of protecting intellectual property, trade secrets, and the like, it cannot be restricted solely on the basis of the experience the employee has gained in his work. Here, although it concerns a former employee who gained experience during his work for the employer, the restriction of competition appeared in rental agreements that do not constitute a framework for employment or trust relationships that require exceptional restrictions on occupation, and therefore, this condition goes beyond the essence and purpose of the agreement and contradicts public policy. Consequently, the contractual restriction is essentially void and the tenant is permitted to sell baked goods.
Published in Legal Channel 432 05.02.2025 Afik & Co. https://he.afiklaw.com/
To read the verdict, Case No. 5734-11-21, Omar Bitar v. Hani Duik
