STSJ M 11523/2025 validity of post-contractual non-competition pact

The Judgment of the High Court of Justice of Madrid, dated 29 September 2025, confirms the validity of a post-contractual non-competition agreement entered into between an employee and the employer company. The worker, hired in May 2022 as a Junior QA, was dismissed in February 2023, and his contract included a non-competition clause with a duration of two years with a compensation equivalent to twelve monthly payments. After the dismissal, the company refused to pay him this compensation, claiming that the clause had been incorporated by mistake, which led the worker to file a lawsuit claiming its fulfilment.

Madrid Social Court no. 11 upheld the claim and recognised the employee's right to receive the agreed compensation. The company appealed, alleging an alleged variation of the claim, an error of consent and the non-existence of an industrial or commercial interest justifying the clause. However, the Madrid Supreme Court rejected all the arguments, considering that there had been no substantial modification, that the alleged error was inexcusable and that the company did have a legitimate interest in protecting the information and knowledge acquired by the employee during the development of a computer application for the insurance sector.

The SCJ recalled that, according to article 1256 of the Civil Code, "the validity and performance of contracts cannot be left to the discretion of one of the contracting parties. Consequently, it upheld the judgment of the lower court in its entirety, recognising the worker's right to receive the agreed financial compensation and ordering the company to pay the costs of the proceedings. In short, the judgment ratified the validity of the non-competition agreement and the company's obligation to comply with it in its entirety.

Article written by ECIJA Madrid Labour Law Department.