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It is very common to introduce a non-disclosure agreement in the employment contract.Such agreement should especially be applicable even after the termination of theemployment relationship. The non-disclosure obligation should be flanked by acontractual penalty on case of any infringement. According to German law a contractualpenalty of one monthly gross salary for each infringement may be validly agreed.2. Restrictive CovenantsAfter termination of the employment, a confidentiality clause is enforceable withoutobligation to pay compensation, whereas a post contractual restrictive covenant will beenforceable only if:• it does not exceed a period of two years• it is concluded in writing• it is necessary to safeguard a justified commercialinterest of the employer• it does not unfairly jeopardize the employee´s futurecareer• the employer obligates himself to pay compensationfor the duration of the restrictive covenant in theamount of at least one-half of all contractual benefitsthe employee last received. 64Other earnings are only deducted if they, together with the compensation, exceed 110%of the employee´s previous remuneration. If the employee must change his residence64 Sec. 74 German Commercial Code.3082723.3