Allegation Of Conduct Contrary To The Non-Competition Clause Based On The Employment Contract Between The Employee And The Employer
Republic of Turkey Supreme Court General Assembly of the Court of Cassation Case No: 2011/9-508
Decision No: 2011/545
Date of Decision: 21.09.2011
Claim for Enforcement of a Penalty Clause – Allegation of Conduct Violating the Non-Competition Clause
– The Basis of the Non-Competition Clause Derives from the Employee’s
Fidelity Obligation Arising from the Employment Contract
– THE COMPETITION PROHIBITION BASED ON THE EMPLOYMENT CONTRACT
IN DISPUTES ARISING FROM THE EMPLOYMENT CONTRACT, THE LABOR COURT HAS JURISDICTION
SUMMARY: The basis of the non-competition clause in question stems from the employee’s duty of loyalty arising from the employment contract,
and the competent court for disputes arising from the employment contract is the labor court.
(Labor Code No. 1475, Art. 14) (Labor Code No. 4857, Arts. 4, 120) (Civil Code No. 818, Art. 159)
(Law No. 1475, Art. 14) (Law No. 4857, Arts. 4, 120) (Law No. 818, Arts. 159, 161, 348, 349, 350, 351, 352) (Law No. 6762,
K. Art. 4, 5) (5521 S. K. Art. 1) (YİBK 29.06.1960 T. 1960/13 E. 1960/15 K.) (YHGK 05.02.2003 T.
2003/9-82 E. 2003/65 K.) (YHGK 22.09.2008 T. 2008/9-517 E. 2008/566 K.)
Case: At the conclusion of the trial regarding the dispute between the parties, the Bakırköy 9th Labor
Court’s decision dated 09.01.2008 and numbered 2007/76 – 2008/1, dismissing the case,
upon the plaintiff’s counsel requesting its review, the Supreme Court of Appeals 9th Civil Chamber’s decision dated 25.01.2010
and numbered 2008/14902 – 2010/1271, ruled as follows:
(…1- Based on the documents in the file, the evidence gathered, and the legal grounds on which the decision is based,
the plaintiff’s appeals outside the scope of the following clause are unfounded.
2- The plaintiff company claimed severance pay and penalty compensation on the grounds that the defendant employee left without notice while working for the company and began working for another company engaged in the same business.
The defendant employee stated that he had married and therefore was not entitled to severance pay,
and further stated that a condition imposed due to his difficult circumstances would not be enforceable.
The court dismissed the case, and the plaintiff appealed the decision.
The court dismissed the case, and the decision was appealed by the plaintiff.
If the woman terminates the employment contract of her own volition within one year of her marriage,
she is not entitled to severance pay (Article 120 of Law No. 4857, which retains Article 1475 of Law No. 1475 in force).
Article 14 of Law No. 1475). The decision is correct in this regard.
A penal clause tied to a non-compete clause is a separate legal concept. In the case of a penal clause tied to a non-compete clause,
the aforementioned compensation may be claimed even if there is no damage in the event of a breach of contract.
The normative basis is BK Art. 159/II. Similarly, under BK Art. 351/II, the employee may be released from the non-competition agreement by paying the penal clause.
However, the reduction rules under BK Art. 161/III are taken into account here.
Reciprocity is not required.
In the present case, the defendant employee began working for a company engaged in the same business as the plaintiff company. It is inevitable that he acts as a sales representative. The employment contract stipulates that he may not work in the same field for a period of six months following termination.
The breach of contract is undisputed.
The court must evaluate the penal clause under Article 161 of the Civil Code and render a decision accordingly.
The decision was rendered in writing, which is erroneous…)
The decision was overturned on this ground, and the case was remanded for retrial.
Following the retrial, the court upheld its previous decision.
After reviewing the case, it was determined that the appeal against the decision to uphold the previous ruling was filed within the prescribed time limit, and
after reviewing the documents in the file, the following decision was reached:
Decision: The case is based on the claim of conduct contrary to the non-competition clause stipulated in Articles 348 and following of the Turkish Civil Code,
and concerns the enforcement of the contractual penalty clause agreed upon in the contract.
The decision of the Local Court dismissing the case was overturned by the Special Chamber upon appeal by the plaintiff’s counsel,
as set forth in the judgment reproduced above, with respect to the penal clause; the Court upheld its previous decision.
The plaintiff’s counsel appealed the judgment.
The dispute brought before the General Assembly of the Court of Appeals through the appeal process
centers on whether compensation for the penalty clause related to the non-competition clause in the indefinite-term employment contract
should be awarded.
During the deliberations of the General Assembly of the Court of Appeals, before proceeding to the merits of the case, it was discussed whether cases arising from Articles 348 and following of the Turkish Code of Obligations, which form the legal basis of the case,
constitute absolute commercial cases as defined in Article 4 of the Turkish Commercial Code, and whether the same
Article 5 of the same Code, the issue of whether the jurisdiction to hear the present case belongs to the commercial court
was raised as a preliminary issue and discussed.
Regarding the evaluation of this preliminary issue;
Articles 348 and subsequent provisions of the Turkish Code of Obligations No. 818, under the heading of Chapter 10,
contain provisions related to competition.
Article 4 of the Turkish Commercial Code states that commercial courts have jurisdiction over commercial disputes, and Article 5 of the same Code states that
commercial courts have jurisdiction over commercial disputes.
On the other hand, Article 1 of the Labor Courts Law No. 5521 states that
civil cases arising from employment contracts or any claims based on the Labor Law between employees
and employers shall be heard by labor courts.
Considering the provisions of the aforementioned Law, it is first necessary to determine the court responsible for hearing cases arising from Articles 348 and subsequent articles of the Turkish Code of Obligations.
In Turkish law, labor and working life were first regulated by the Law on Weekly Holidays, which entered into force in 1924,
and subsequently, detailed regulations were introduced by the Civil Code No. 818, which entered into force in 1926.
Due to changes in the labor market and the special needs of workers,
Due to changes in the labor market and the specific needs of workers, as a requirement of the social state principle enshrined in the Constitution,
the legislature increasingly felt the need to intervene in this area with regulatory measures.
As a result, the Labor Code No. 931 was first enacted in 1967.
was enacted in 1967; following the annulment of this Law by the Constitutional Court, Law No. 1475 was enacted in 1971,
and finally, the Labor Code No. 4857 was enacted in 2003.
None of these special laws have repealed the provisions of the Civil Code relating to work and employment;
on the contrary, the legislator has explicitly emphasized that they shall apply to disputes arising from employment contracts
and service contracts outside the scope of the Labor Laws, provided they do not conflict with the provisions of the Labor Law.
The duty of loyalty arising from the establishment of an employment contract is the obligation of the employee to protect and safeguard the employer’s interests.
The duty of loyalty arising from the establishment of the employment contract is the employee’s obligation to protect and safeguard the employer’s interests.
The duty not to compete, on the other hand, is a consequence of the employment contract; it represents the negative aspect of the employee’s duty of loyalty to the employer.
It should be noted that the duty not to compete during the continuation of the employment contract is an obligation within the duty of loyalty.
It should be noted that the employee’s obligation not to compete with the employer during the term of the employment contract is a duty included within the duty of loyalty. On the other hand, the parties may agree to include a provision in the employment contract
or enter into a separate agreement (non-competition agreement) regarding the employee’s obligation not to compete after the termination of the employment relationship.
The employee’s obligation not to compete with the employer After the employment contract ends,
the employee’s duty not to compete with the employer only applies if such an obligation is agreed upon in the contract
(Sarper, Süzek: Labor Law, Beta Publications, 2005,
p. 277).
Since the employee is in a weaker position compared to the other party (the employer) in the service contract, the law has deemed it necessary to regulate the provisions regarding the non-competition clause to be included in the service contract in a special manner to prevent the employer from exploiting the employee by obtaining unfair advantages.
The provisions introduced by the provisions of Articles 348-352 of the Turkish Code of Obligations apply only to non-competition agreements entered into under a service contract.
The provisions introduced by the Civil Code Articles 348-352 apply only to non-competition agreements entered into under a service contract
(Cevdet, Yavuz: Lectures on the Law of Obligations—Special
Provisions, Beta Publications, 2006, p. 276).
The limitations set forth in this provision, which is intended to protect the employee, cannot be applied to other contracts in this case
(Hıfzı Veldet Velidedeoğlu: Commentary on the Turkish Civil Code, Supreme Court Publications 1987,
p. 561).
It is not possible to assume that every service contract necessarily concerns a commercial enterprise.
Therefore, it is meaningless to classify a lawsuit arising from the breach of a non-competition clause in a service contract entered into by an individual at the craftsman level
as an absolute commercial lawsuit under this provision. Such a
dispute arising from this type of contract is not related to commercial life and its resolution does not require
special expertise (Sabih, Arkan: Commercial Enterprise Law, 9th Edition, Bank and Commercial Law Research
Institute 2005, pp. 94-95).
The non-competition clause regulated in Article 348 of the Turkish Code of Obligations is not a contract that creates a primary obligation;
rather, it creates a secondary obligation arising from the employment contract. The basis for regulating the non-competition clause arising from employment relationships
is the employment relationship itself.
When regulating employment relationships, the state must establish special substantive legal rules to protect workers
, it is also necessary to refer the resolution of labor disputes, as a legal dispute, to a specialized (specific) judiciary separate from the general judiciary,
which adjudicates according to procedures tailored to the objectives of Labor Law, i.e., procedures that are simple, swift, and
cost-effective. This necessity,
as in most countries, also implies in Turkey that labor cases should be heard in specialized courts,
i.e., labor courts, according to a procedure different from general judicial procedures, thereby necessitating the existence of a labor
judiciary (Hamdi, Mollamahmutoğlu: Labor Law, Turhan Publications
2004, p. 103).
According to the decision of the Supreme Court’s Judicial Unity Board dated June 29, 1960, numbered 1960/13 and 1960/15; Labor
courts were established for the purpose of hearing cases arising from labor contracts in courts with special knowledge in these matters
established for the purpose of hearing cases arising from labor contracts in courts with specialized knowledge in these matters. Legal disputes arising from any claims based on labor contracts or labor laws between employers and persons considered workers (except for those working in jobs exempted under paragraphs C, D, and E of Article 2, as amended by law)
shall be resolved in these courts.
Within this scope, the Labor Courts Law No. 5521, which was enacted and entered into force in 1950,
stipulates that:
Pursuant to the Labor Courts Law No. 5521, enacted in this context and entered into force in 1950;
for a dispute to be heard in labor courts, there must be a legal dispute arising from any claims based on the employment contract
or labor law between the employer and the persons considered as employees
(Supreme Court of Appeals, General Assembly of Civil Chambers, decision dated February 5, 2003, No. 2003/82-65).
In this context, the basis for the subject matter of the lawsuit, the non-competition clause, stems from the employee’s duty of loyalty arising from the employment contract,
and the competent court for disputes arising from the employment contract
is the labor court.
On the other hand, labor disputes are special types of legal disputes. Article 1 of Law No. 5521 defines labor disputes falling within the jurisdiction of labor courts as legal disputes arising from claims based on the Labor Code between persons deemed employees under the Labor Code
and employers or their representatives,
regarding any rights arising from the employment contract or the Labor Code.
Thus, labor disputes, which are legal disputes falling within the jurisdiction of labor courts, are disputes between parties and regarding matters defined by law; Thus, labor disputes, which fall within the jurisdiction of labor courts as legal disputes, are disputes whose parties and subject matter are determined by law;
that is, they are disputes of a specific nature, and since the rules of jurisdiction relate to public order, their content cannot be arbitrarily determined.
Therefore, as a court of law, labor courts cannot naturally hear administrative or criminal disputes, even if they arise from an employment contract or the Labor Code.
Furthermore, since the rules of jurisdiction relate to public order, the content of such disputes cannot be arbitrarily determined. Therefore, as a civil court, labor courts cannot naturally hear administrative or criminal disputes,
even if they arise from an employment contract or the Labor Code,
nor can they hear disputes between employers and employees outside the scope of the Labor Code,
even if they arise from an employment contract. Disputes of this latter type,
where the parties are an employee and an employer and the source is an employment contract, cannot be classified as labor disputes
and, as such, cases involving such disputes cannot be considered labor cases
; they generally fall under civil disputes and civil cases (Hamdi,
Mollamahmutoğlu: Labor Law, Turhan Publications 2004, pp. 104-105).
Since the Labor Courts Law No. 5521 was enacted while the Labor Law No. 3008 was in force,
the provision in Article 1 should be understood to refer to workers other than those defined under the Labor Law No. 4857 and listed in Article 4.
The term “worker” in the Labor Law No. 5521 should be interpreted as a worker covered by the Labor Law.
In this case, the term “worker” in Article 4 of the Labor Law No. 4857, titled “Exceptions,” In this case, for lawsuits filed by persons listed in Article 4 of the Labor Code No. 4857 under the heading “Exceptions”
and those working in the specified jobs,
general courts, not labor courts, have jurisdiction.
Indeed, the explanations and principles set forth above regarding the competent court have been fully adopted in the decision of the General Assembly of the Supreme Court dated September 22, 2008, No. E:2008/9-517, K:566.
Ultimately, based on Articles 348 and following of the Turkish Code of Obligations No. 818, it was accepted that labor courts are competent to hear cases involving the enforcement of a penalty clause arising from the breach of a non-competition agreement by an individual classified as an employee under the Labor Code.
After the preliminary issue was resolved by a majority vote, the merits of the case were examined.
In examining the merits of the case:
Based on the parties’ mutual claims and defenses, the records and evidence in the file, and the compelling reasons explained in the reversal decision, the Supreme Court of Appeals proceeded to examine the merits of the case.
In examining the merits of the case;
Based on the parties’ mutual claims and defenses, the records and evidence in the file, and the compelling reasons
stated in the reversal decision, it is necessary to comply with the reversal decision of the Special Chamber, which was also adopted by the General Assembly of the Court of Cassation.
However, the refusal to comply with the previous decision is contrary to procedure and law. Therefore, the refusal decision
should be reversed.
Result: The appellant’s appeal objections are accepted, and the decision to uphold the previous ruling is reversed in accordance with the Special Chamber’s reversal decision
and the reasons stated above, pursuant to Article 429 of the Code of Civil Procedure.
The decision was made unanimously on September 21, 2011.