Non-Compete and Stay Clauses in Portuguese Employment Contracts

Last verified: October 2026.

Who this is for

• You work for an employer in Portugal and your contract has a non-compete or stay clause.
• You are about to sign a job offer, or about to leave a job for a competitor.
• You want a second job and your employer objects.

Not for you if: you want the general rules on contracts, pay, notice, and severance. Read Employment Contracts, Pay, and Worker Rights in Portugal instead.

In Portugal, a clause that limits your freedom to work after you leave a job is void by default. A non-compete clause (pacto de não concorrência) is valid only if it is in writing, covers work that could really harm your employer, and pays you compensation while it lasts.

It can last at most two years, or three years for roles of special trust. A stay clause (pacto de permanência) can tie you to a job for at most three years, and you can always leave by repaying the training costs.

The starting rule: you are free to work

The Labour Code (Código do Trabalho) says that any clause in a contract or collective agreement that could harm your freedom to work after the contract ends is void. A non-compete clause is a narrow exception to that rule. If the clause does not meet every condition, it does not bind you.

The same freedom protects you from deals between employers. An agreement between companies not to hire each other's staff, or to charge a fee if they do, is void. This includes such clauses in temporary agency contracts.

When a non-compete clause is valid

A non-compete clause can limit your work after you leave only if all three of these conditions are met:

1. It is in writing. It must be in a written agreement, such as your employment contract or the agreement that ends it.
2. It covers harmful activity. The work it restricts must be work that could cause harm to your employer.
3. It pays you compensation. You must receive compensation during the period when your work is restricted.

If the clause meets all three, it can last up to two years after the contract ends. It can last up to three years if your role involved a special relationship of trust, or access to information that is particularly sensitive for competition.

How much compensation

The law does not set a percentage or a minimum amount. You and your employer agree it. Figures you may see quoted, such as a share of your salary, are not in the law.

The law does allow two adjustments:

• Training costs. The compensation can be fairly reduced if your employer spent heavily on your professional training.
• Unlawful dismissal. If a court finds your dismissal unlawful, or you resign with just cause because of your employer's unlawful act, the compensation rises up to your base salary at the date the contract ended. If the employer does not pay this higher amount, it cannot enforce the clause.

In that second case, money you earn from a new job started after you leave is deducted from the higher compensation. The deduction cannot take it below the originally agreed amount.

If the clause is not valid

If a non-compete clause fails any condition, it is void. The most common reason is that no compensation was agreed. A void clause does not bind you, so you are free to take the competing job.

Real cases turn on the wording of your contract and the facts. Before you rely on a clause being void, get advice from a labour lawyer or a trade union. If you cannot afford a lawyer, see Applying for Legal Aid in Portugal.

Stay clauses (pacto de permanência)

A stay clause is a promise not to resign for a set time. It is allowed only to compensate your employer for heavy spending on your professional training. Think of an employer that pays for an expensive qualification and asks you to stay on afterwards.

The limits are:

• The period cannot be longer than three years.
• It must be linked to heavy training costs (despesas avultadas). It is not a general lock-in.
• You can free yourself at any time by paying back the amount of those training costs.

In practice, a stay clause works as a repayment promise, not as a ban on leaving. Before you sign one, ask for the training costs in writing, so you know what you would owe.

Competing while you still work there

While your contract lasts, you owe your employer a duty of loyalty. The law says you must not do business, for yourself or for others, in competition with your employer. You must also not disclose information about its organisation, production methods, or business.

This duty applies automatically. No clause is needed, and no payment is owed for it. It ends when your contract ends. After that, only a valid non-compete clause can restrict competing work.

Your right to a second job

Your employer cannot stop you from doing other paid work, or treat you badly because you do. The only exceptions are objective grounds, such as health and safety, or professional confidentiality. Breaking this rule is a very serious offence for the employer.

Some limits still apply to you:

• You must not take a second job that competes with your employer or breaks confidentiality. That would breach your duty of loyalty.
• Special laws on conflicts of interest still apply, for example in some public sector jobs.
• Working time limits still apply. The average working week, including overtime, cannot exceed 48 hours. This is measured over four months, unless a collective agreement sets a period of up to 12 months.

A checklist before you sign or leave

• Is the non-compete in writing? If not, it is void.
• Does it pay you compensation for the restricted period? If not, it is void.
• Is it two years or less? Three years is allowed only for roles of special trust or sensitive information.
• Could your new job really harm your old employer? If not, the restriction has no basis.
• Is there a stay clause? Check that it is linked to training costs, lasts three years or less, and states how much you would repay.
• Is your employer blocking a second job? That is only lawful on objective grounds, such as safety, health, or confidentiality.

Getting help

1. Ask your employer in writing to explain the clause and the compensation.
2. Check whether a collective agreement covers your sector.
3. If your employer breaks the second-job rule or another labour rule, complain to the labour inspectorate (ACT). Anyone can complain, and your identity is protected.
4. For a dispute over whether a clause binds you, speak to a labour lawyer or a trade union. The labour court decides contested cases.

The government has proposed changes to the Labour Code. This guide reflects the law in force on 2 October 2026.

This guide is general information, not legal advice. Rules change often; check the official source before you act.

Sources

This guide is written from official sources and, where relevant, organisations' own websites.

• PGD Lisboa, Labour Code (Lei n.º 7/2009), consolidated: https://www.pgdlisboa.pt/leis/lei_mostra_articulado.php?nid=1047&tabela=leis (article 128(1)(f) duty of loyalty; article 129(1)(k), (2), and (3) second job, as amended by Lei n.º 13/2023, very serious offence; article 136 non-compete conditions, two and three years, reduction for training, unlawful dismissal, deduction; article 137 stay clause, three years, repayment; article 138 no-poach agreements void; article 211 48-hour average), checked 2 October 2026
• gov.pt, complaint to ACT: https://www2.gov.pt/servicos/fazer-uma-queixa-a-autoridade-para-as-condicoes-do-trabalho-act- (who can complain, anonymity, carried from verified guide W2B-17), checked 1 October 2026
• Government of Portugal, labour reform proposal: https://portugal.gov.pt/gc25/comunicacao/documentos/proposta-de-lei-trabalho-xxi (labour reform proposal, carried from verified guide W2B-17), checked 1 October 2026

Last verified October 2026. Rules and fees change; check the official source before acting.