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Restrictive Covenants and Trade Secrets in Lebanon           Date: 2010-05-09

Article prepared by Christel A. Salem , speaker at the “2010 Midyear Meeting of the International Labor & Employment Law Committee of the American Bar Association” and published in “Restrictive Covenants and Trade Secrets in Employment Law- An International Survey” Vol. II BNA Books Authored by the ABA Section of Labor & Employment Law

 

Lebanon is a free market economy country based on the freedom of commerce and private entrepreneurship principles. The Lebanese constitution provides that Lebanon is a founding member of the United Nations bound by the Universal Declaration of Human Rights.

 

Several Lebanese public policies and constitutional principles establish rules that might, in principle, be considered as not favorable to restrictive covenants, such as the freedom of commerce, the principle of free fair competition, and the right to work.

 

However, notwithstanding public policy that elevates freedom of each person to engage in a professional path or in commercial dealings and the freedom to engage in fair competition to the level of being one of the principle foundations of the free market economy system, there are other policies of good faith and honesty and other customs applicable to commercial dealings that may favor restrictive covenants the application of which supports due compliance with such policies. Hence, even where competition is free, it remains bound by principles of good faith and honesty in commercial dealings, another important policy consideration that justifies punishment of unfair and “parasitic” competition, hence favoring restrictive covenants that would help preventing such punishable actions.

 

National statutes governing restrictive covenants are the Civil Code, the Labor Law, the Commercial Code (only in respect of commercial establishments’ divestiture), the Intellectual Property Laws, and the Criminal Code. In this context, national statutes lay down rules governing organization of contractual, commercial, and employment relationships among citizens along the lines of Lebanese public policies.

 

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