POLAND: Statutory possibility of breaking the non-competition agreement by the principal (due to COVID-19).

During the period of an epidemic emergency or a state of epidemic caused by SARS-Cov-2 virus in Poland, a provision is in force that allows the principal to terminate the non-competition agreement in force after the termination of the agency agreement with a short 7-day notice period (Article 15 gf of the Act on special solutions related to the prevention, counteraction and combating of COVID-19).

Olga SZTEJNERT-ROSZAK - 17.12.20
Country expert

This is a privilege that only serves the principal and enables him to avoid paying the agreed compensation to the agent.

This solution - concerning not only agents but also employees or service providers - is criticized, because it interferes with the principle of freedom of contract and unjustifiably gives the right to terminate the contract to only one party, depriving the other party of the compensation due. Moreover, the right to terminate a non-competition agreement does not depend on a possible deterioration in the financial situation of the principal; it is an absolute right. Of course, the consequence of the termination of the contract will be to release the agent from the ban on competing activities.

The termination may affect both an agent with whom a non-competition agreement is already in force and an agent with whom a non-competition agreement is only just entering into force, provided that there is an epidemic emergency or state of epidemic. Currently, a state of epidemic is announced in Poland.



Olga Sztejnert-Roszak, IDI Country Expert for agency & distribution in Poland