In business practice, anti-poaching clauses are becoming increasingly common provisions whereby the contracting parties agree not to hire each other’s employees during or after the termination of their business relationship.
Although at first glance these clauses may appear to be a logical mechanism for protecting business interests, the legal framework for their application in Serbia—as in many other jurisdictions—is not entirely clear. In this brief article, we will explore when and how anti-poaching clauses are used, what their advantages and risks are, and why companies should carefully consider whether and how to include them in their contracts.
What Are Anti-Poaching Clauses?
Anti-poaching clauses are contractual prohibitions against “poaching” each other’s employees—typically with a time limitation (e.g., 6 or 12 months after contract termination, but sometimes for several years). These clauses most often appear in employee leasing agreements, service agreements (e.g., IT outsourcing), franchise contracts, and joint venture arrangements.
The aim is clear: to prevent one party from bypassing the other and directly hiring employees in whom the latter has previously invested—through recruitment, training, or skill development. This is especially relevant when the employees involved are a crucial element of the contract’s execution.
The Problem: Labor Market Restriction
While there may be legitimate business reasons for including such a clause, the legal dilemma runs deeper. Anti-poaching clauses may be considered restrictive because they: (i) limit the right of employees to freely choose their employer; (ii) potentially suppress the labor market wage level; (iii) constitute a form of market allocation between employers—which goes against the principles of competition law. These concerns are especially pronounced where employers have significant market power.
In EU practice, the European Commission has already sanctioned horizontal anti-poaching agreements between competitors as prohibited restrictions of competition.
That said, in some jurisdictions, anti-poaching clauses may be deemed legitimate—particularly when they are ancillary provisions to a broader business relationship (e.g., franchise, joint venture), and where there is a valid business justification for such restrictions.
Legal Framework in Serbia
Anti-poaching clauses are not explicitly regulated under Serbian law. They can be interpreted as contrary to the constitutional right to work, or as a restrictive agreement dividing the labor market. On the other hand, they may be defended under the principle of freedom of contract and the need to protect specific business investments—such as those made in human capital.
Even if the business interest in protecting investments in employees is acknowledged as legitimate, one could argue that this aim is better addressed through non-compete clauses with employees, which are explicitly regulated under Serbian labor law and permitted under legally defined conditions.
In practice, the legal assessment of an anti-poaching clause would depend on various factors: whether it is part of a broader business cooperation (e.g., an ancillary clause); the scope and duration of the restriction (in terms of time and geography); the market strength of the contracting parties; the nature of the legitimate interest being protected.
Since there is no consistent case law or official legal opinion on the matter, each case requires an individual legal assessment.
What Should Companies Know in Practice?
If your company is considering including an anti-poaching clause in a contract (or has been presented with one by the other party), it is advisable to:
Consider the business rationale: Do you have a realistic investment in employees that needs protection?
Assess proportionality: Is the restriction reasonable in duration and scope?
Think about alternatives: A well-drafted non-compete clause with employees may be more appropriate and easier to enforce.
Be aware of risks: If challenged, such a clause may be deemed unenforceable, and in some cases may even trigger sanctions under competition law, especially if the parties are competitors with significant market shares.
Conclusion: Use with Caution and Legal Advice
Anti-poaching clauses can serve as a useful protective tool, but they are legally sensitive. Depending on the context, they may be unenforceable—or even punishable. Since this area lies in a legal grey zone, companies should pay close attention to when and how anti-poaching clauses are used, and ensure they are structured in a way that protects legitimate business interests while minimizing legal risk. That is why it is essential to consult with a legal expert familiar not only with labor law, but also with competition law. A properly drafted clause can safeguard your interests—whereas a poorly formulated restriction may cause more harm than good.
Contact:
office@dnvg-law.com
This text is written for informational purposes only and does not constitute legal advice. We are at your disposal for any additional information.
