Executive employment briefing · 18 June 2026

Why non-compete compensation is not a footnote

A practical introduction to Karenzentschädigung in German post-contractual non-compete clauses.

Two professionals shaking hands across a table

German post-contractual non-competes are not assessed solely by asking which competitors are named. The employer’s compensation promise—Karenzentschädigung—is central to the statutory framework.

The compensation and the restriction travel together

A covenant intended to bind after employment generally needs written form and compensation meeting the applicable legal threshold. The calculation can become complicated where remuneration includes variable pay, benefits or fluctuating elements. A percentage in the clause is not enough if the base and payment timing remain unclear.

Duration and activity still matter

Compensation does not rescue a restriction that reaches further than the employer’s legitimate interest supports. Review the prohibited activity, territory, customer groups and maximum duration against the role actually held.

Waiver wording has timing consequences

An employer may seek to waive the restriction, but the financial effect may not end on the day of the waiver. Exit agreements sometimes use broad language without addressing that lag clearly. Read the covenant, termination document and waiver together.

Before accepting a new role, assemble the signed agreement, amendments, recent remuneration details and any release correspondence. The practical answer depends on that complete set.