Restrictive covenants
Non-compete provisions under current US law and practice (noting that the Federal Trade Commission has proposed a ban in non-compete clauses in most employment agreements) tend to be given by sellers for quite long periods, commonly three to five years.
Austria
In Austrian deals the period is usually one to two years, because longer than two years is generally viewed by the courts as overly restrictive and not enforceable.
Czech Republic
In Czech deals the non-compete period for sellers commonly negotiated in transaction documents is usually one to two years, because longer than two years is generally viewed by the courts as overly restrictive and not enforceable.
If the sellers remain with the company as management members, non-compete clauses are usually negotiated in the relevant employment / service contracts. It depends on the type of contract a particular member of management has concluded. While the Czech Labour Code allows for a non-compete clause in an employment contract up to a maximum of one year after the end of employment, a slightly longer non-compete period can be agreed to in a service agreement with an executive.
General note on contracts concluded with management members according to Czech law: A service contract according to the Business Corporations Act is usually concluded with executives of a company (i.e. managing directors in the case of a limited liability company and board members in the case of a stock corporation), the relationship between the company and its executives is a commercial relationship. It is not recommended to enter into an employment contract with the executives. On the contrary, management members who are not company executives have a standard employment contract concluded in accordance with the Labour Code.
Poland
In Polish deals this period is usually between one and three years.
Hungary
In Hungarian transactions, the maximum legally permitted duration for post-closing non-compete provisions is three years. This statutory limit is mandatory and cannot be contractually extended by the parties. As a result, any non-compete undertaking that exceeds this period will be unenforceable by Hungarian courts beyond the three-year threshold.
Slovakia
In Slovakian deals the period is usually one to two years, because longer than two years is generally viewed by the courts as overly restrictive and not enforceable.
In Slovakia, non-compete undertakings given by sellers are common, but their enforceability depends on scope and duration. Slovak courts generally assess such clauses under the principles of proportionality and fairness. Where customer goodwill is being transferred, a non-compete may be agreed for a period of up to two years. If the transaction also involves the transfer of know-how, the restriction can extend to a maximum of three years. The same principles generally apply to non-solicitation undertakings.