Dismissal due to unfair competition

The prohibition of the worker to refrain from competing and harming the employer's interests, although not expressly indicated in an internal rule, is generically derived from contractual good faith and the duty of loyalty that prevails in every employment relationship. In this sense, the Second Chamber of the Supreme Court of Justice has established the following:

"So, one of the manifestations of the general principle of good faith is the non-competition agreement, which refers to the prohibition that the worker has from engaging in other work activities of the same nature as those carried out, under the employment contract, which generate contradictory interests, to the detriment of the employer." (Resolution 2007-998, Second Chamber)

Despite the above, the duty not to compete with the employer can also be accentuated during the employment relationship by an exclusivity agreement or through a non-competition agreement after the termination of the contractual relationship. The impact of the worker on the company's competitive position in the market constitutes a case of non-compliance that warrants the application of disciplinary dismissal and generates a loss of trust.

In a strict sense, unfair competition implies a transgression of the worker's impediment from engaging in the same activities in which the company operates by interfering in the same market and the same clients. Following Spanish jurisprudence, Ortega Lozano has established that for this cause of non-compliance to be established, two requirements must be met: concurrence and disloyalty. According to his position, competition must be understood as intervention in a market at the same time and place, which leads him to conclude that the worker's non-compliance must match the geographical, temporal, and material scope in which the company operates commercially for unfair competition to take place. On the other hand, disloyalty is configured by the worker's behavior contrary to good faith and the employer's interests. (Pompeyo Gabriel Ortega Lozano, “La buena fe contractual y el abuso de confianza en el desempeño del trabajo como causa de finalización de la relación laboral”, Revista Española de Derecho del Trabajo 213 (2018): 11)

In a broad sense, unfair competition occurs when the worker carries out preparatory or executory activities that enable him to compete with his employer and from which direct or potential harm may necessarily be generated (Resolution 1998-63, Second Chamber). Due to this broad conception of non-compliance that encompasses unfair competition, various types of behavior that justify disciplinary offense can be brought together in this cause.

Likewise, unfair competition occurs when the worker works for two or more employers who are dedicated to the same line of business (Resolution 2000-925, Second Chamber). In this sense, as recognized by jurisprudence, the worker is not prohibited from working simultaneously in another job; however, he must not engage in other jobs that may harm and compete with his employer.

Generally, the blame for this type of non-compliance lies in the worker's improper use of the knowledge acquired through his work within the company (for example, knowledge of clients, know-how, suppliers, etc.), placing him in a position of advantage, affecting free competition and the interests of his employer. Concerning what was previously described, the Second Chamber of the Supreme Court of Justice, citing the author Iglesias Calero, has described the following:

"The scope of the prohibition is limited to those activities that are carried out within the same level in which the main company carries out its activities, for affecting the same market and the same potential circle of clients, the former being carried out in an unfair manner, with disregard for the requirements of good faith, through the use of internal data of the company that is known due to their work in it and that When they refer to its organizational or production system or deal with the relationship with its suppliers or clients, they can cause potential harm to the former, by altering the game of free competition, providing a position of advantage for the second activity."(Resolution 1998-205, Second Chamber)

A distinctive feature of unfair competition is that, for the behavior to be classified as severe and culpable to determine the appropriateness of disciplinary dismissal, it is not necessary that the non-compliance has caused or consummated harm against the company.

According to the position of jurisprudence, it is only necessary to determine the admissibility of disciplinary dismissal in this case of non-compliance, that the failure has caused potential or actual harm to the employer (Resolution 1998-063, Second Chamber). In the same way, for unfair competition to exist, the interests of the employer must be affected in a real and effective manner, regardless of whether the conduct carried out by the worker was consolidated in its entirety or not (Resolution 1998-063, Second Chamber).

The assessment of the seriousness of the fault in this case of non-compliance generally takes into consideration the intensity of the worker's participation in the activity that constitutes competition (Pompeyo Gabriel Ortega Lozano, “La buena fe contractual y el abuso de confianza en el desempeño del trabajo como causa de finalización de la relación laboral”, 11). Therefore, the greater the participation on the part of the worker, the greater the reproach and severity of the behavior.

In this sense, the dismissal of a worker who formed a legal partnership with a co-worker to provide the same cleaning services as his employer has been classified as justified (Resolution 2012-487, Second Chamber). In this case, to determine the seriousness of the fault, it was considered that the company made up of the workers provided services at a lower cost than the employer, that they had executed a job offer for a client, and if they had carried out not only preparatory acts but also effective against the interests of the employer.

In this same sense, the severity of non-compliance can also be generated from using the knowledge acquired by the worker in the employment relationship to benefit the activity they perform concurrently. Consequently, the more evidence demonstrating the abuse of the knowledge acquired in the company by the worker, the greater the seriousness of the breach.

On the other hand, circumstances that justify or reduce the importance of the competition actions incurred by the worker serve as mitigating circumstances for non-compliance, such as the worker communicating and obtaining the consent of his superiors or employer regarding the actions he intends to carry out.

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About the Autor

Alejandro Godínez Tobón

Alejandro Godínez Tobón

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