Basically, the employer wants to avoid that informal operating capital such as customer contacts, special knowledge and strategies benefit a competitor company in the event of a job change. With the competition clause, the employee should be prevented from changing to a competitor immediately or after a certain time (transition period) or to found a competitor company him/herself.
The competition clause is only valid under certain circumstances and depends on the type of termination of the employment relationship. The employer can also claim his/her rights deriving from the competition clause if he/she terminates the employment relationship and states that he will pay the employee the remuneration he/she is entitled to during the period of limitation.