The concept of “territorial scope” in a non-compete agreement (Top24 Lavoro Ai – Il Sole 24 Ore, 24 September 2026 – Vittorio De Luca and Alessandro Ferrari)

Interpretative issues in light of the most recent case law on the nullity of non-compete agreements due to the indeterminacy of territorial scope

By an order issued on 2 April 2026 in the context of interim proceedings, the Milan Court held a non-compete agreement to be null and void due to the indeterminacy of its territorial limitation. In essence, the agreement contained both a “mobile territorial identification” clause, under which the restricted area was determined by reference to the employee’s workplace at the time of termination, and a “remote-working” clause, extending the prohibition to work activities carried out outside the contractually defined geographical area where such activities were intended to produce effects within that area.

Adopting an approach that affords greater protection to employees, the decision forms part of an ongoing judicial debate concerning the interpretation of the concept of “territory” in non-compete agreements. The absence of a settled case-law position is confirmed by Milan Court of Appeal judgment No. 280 of 29 May 2026, which departs, albeit indirectly, from the decision rendered by the Milan Court less than two months earlier.

The issue therefore remains open to complex interpretation and, in practice, continues to be largely entrusted to the assessment of the court called upon to rule on the matter in each individual case.

The applicable legal framework

To fully understand the scope of the most recent decisions mentioned above, it is necessary to outline first the statutory framework and then the body of case law within which they arise.

The cornerstone of the regulation is Article 2125 of the Italian Civil Code, which sets out the essential requirements for the validity of a non-compete agreement:

1. Form: under penalty of nullity, a non-compete agreement must be executed in writing and must provide for compensation in favour of the employee. The restriction must also be limited (again, in writing) with regard to its subject matter, duration, and territorial scope.

Read the full version published on Top24 Lavoro Ai – Il Sole 24 Ore.