Up to a Third of Portugal's Private-Sector Workers Are Tied to Non-Compete Clauses, the OECD Finds

Somewhere between a quarter and a third of Portugal's private-sector employees are bound by a non-compete clause — a contract term that restricts where they can work after they leave their current employer — according to a new OECD study published on 7 July 2026. The finding, part of the OECD's Employment Outlook 2026, puts a number on a practice that is far more widespread in Portugal than most workers realise, and one the OECD argues is quietly holding down wages and job mobility.

The headline range comes from what employers themselves report. Asked how many of their staff are covered, Portuguese firms put the figure at 24% to 32% of private-sector employees — broadly in line with, or slightly above, the OECD average of 20% to 30%. Tellingly, workers report far less: only 12% say they are definitely bound by a non-compete clause, with another 15% who think they "probably" are. The OECD reads that gap as a sign of "more limited awareness among workers" — many people have signed one without registering what it means.

What a non-compete clause actually does

A non-compete clause (in Portuguese, a pacto de não concorrência) is an agreement that, for a set period after you stop working for a company, you will not take a job with a competitor or set up a rival business. Employers defend them as a way to protect trade secrets, client relationships and expensive training. Critics — now including the OECD — argue they are increasingly used far beyond that narrow purpose, tying workers' hands even when there is no real secret to protect.

Portugal's data point squarely at that drift. The OECD found these clauses reaching well past senior, information-sensitive roles: in the employee survey, between 8% and 20% of workers with no access to confidential information had signed one, as had 13% to 32% of fixed-term staff and 12% to 29% of low-paid workers earning under €800 a month. Non-compete terms also travel in packs — Portuguese employers reported pairing them with non-disclosure agreements (58% of firms), clauses barring the poaching of clients (29%) and training-cost repayment clauses (19%).

Why the OECD says this matters for pay

The OECD's central worry is that non-compete clauses reduce workers' ability to change jobs — and the freedom to walk to a better-paying employer is one of the main things that pushes wages up. "Growing evidence suggests they are often overused, limiting worker mobility, wage growth, and innovation," the study says.

Part of the effect is psychological. The OECD notes that more than 40% of covered employees say they would not breach a non-compete clause even when it is unlikely to hold up in court — so the clause suppresses job-switching regardless of whether it is legally enforceable. In Portugal specifically, the OECD observes that many clauses appear to reach into "parts of the labour market where the traditional justification appears weak or absent," and that a good number of them may not actually be enforceable under Portuguese law.

A separate but related concern is competition between firms. About 52% of surveyed companies said they were aware of no-poaching or wage-fixing arrangements — where employers quietly agree not to hire each other's staff or to hold pay down — occurring in their industry, just above the 48% OECD average. The OECD is careful to stress that awareness is not the same as participation, and that the figure "does not imply that half of firms engage in these practices themselves." But it is enough of a signal that Portugal's competition authority has been paying closer attention to conduct in the labour market.

What Portuguese law already says

Non-compete clauses are not a legal grey area in Portugal — they are governed by Article 136 of the Código do Trabalho (the Labour Code). The default position is strict: any clause that limits your freedom to work after a contract ends is null. A non-compete is lawful only as a narrow exception, and only if three conditions are met at once — it must be in writing, the restricted activity must be one that could genuinely harm the former employer, and the employer must pay the worker compensation during the restricted period. The maximum duration is two years, rising to three for roles involving special trust or access to competitively sensitive information.

That compensation requirement is the crucial catch, and it is why the OECD suspects many Portuguese clauses would fail in court: a non-compete with no payment attached is simply void, and the worker is free to ignore it. (Our companion guide walks through exactly when one of these clauses is binding — and when it is not.)

The wider wage picture

The same OECD report struck a cautious note on pay more broadly. Across the OECD, average real wage growth slowed to 2.2% in the first quarter of 2026, down from 2.7% a year earlier, and real wages remain below their early-2021 level in roughly a third of member countries. With fresh inflationary pressure coming from higher energy costs, the OECD expects real wage growth to slow further still — though it noted the lowest-paid workers have generally held up better against inflation, thanks to minimum-wage increases. That energy-and-wages warning is an OECD-wide framing rather than a Portugal-specific forecast.

What This Means for You

• If you work in Portugal's private sector: there is a real chance your contract contains a non-compete clause — check it. Employers report that up to a third of staff are covered, and many workers do not realise they have signed one.
• Before you accept a job offer: read the restrictive clauses, not just the salary. A non-compete can limit where you work next, and non-solicitation or training-repayment terms are increasingly bundled in alongside it.
• If you are leaving a job: a non-compete clause with no compensation attached is not valid under Article 136 of the Labour Code — but the rules are technical, so get the specifics right before you assume a clause can be ignored.
• The bigger point: the OECD's argument is that these clauses can quietly cap your earning power by making it harder to move to a better-paid role. Knowing whether yours is enforceable is worth the effort.

The study lands as Portugal debates how to lift stubbornly low wages. The OECD's message is that part of the answer may lie less in headline pay policy and more in the fine print of employment contracts — where, for up to a third of private-sector workers, a clause they may barely remember signing is helping to keep them where they are.