The Court of Cassation’s Grand General Assembly for the Unification of Case Law (“Assembly”) ruled that disputes arising from the breach of non-compete agreements concluded pursuant to Article 444 of the Turkish Code of Obligations (“TCO”) fall within the jurisdiction of the Commercial Courts of First Instance. The decision was published in the Official Gazette dated 12 September 2025 (No. 33015).
Accordingly, it has been confirmed that lawsuits seeking the payment of penalty clauses, compensation, or injunctions against former employees who violate non-compete obligations shall be heard before the commercial courts rather than the labour courts.
Previous Inconsistencies in Practice
For a long time, there had been no uniform application among judicial bodies regarding the competent court in disputes arising from non-compete obligations. In the past, the 11th Civil Chamber and the General Assembly of Civil Chambers of the Court of Cassation had considered disputes between employers and employees concerning non-compete agreements to be of a commercial nature, thereby recognizing the Commercial Courts of First Instance as the competent court.
On the other hand, the 9th Civil Chamber of the Court of Cassation and the (now closed) 22nd Civil Chamber, in their decisions, predominantly concluded that disputes arising from non-competition clauses should be resolved in labour courts.
Particularly with the introduction of the Regional Courts of Appeal, some of its chambers ruled that labour courts had jurisdiction, while others adopted the view of the 11th Civil Chamber and argued that commercial courts were competent. These conflicting decisions caused significant confusion and procedural delays in practice for a long time. Cases filed before the incompetent court were dismissed for lack of jurisdiction, overturned on appeal, and consequently caused loss of both time and rights of the parties involved.
With its decision dated 13 June 2025, the Assembly definitively ruled that disputes arising from Articles 444 to 447 of the TCO fall within the jurisdiction of the Commercial Courts of First Instance, thereby resolved the long-standing uncertainty in practice.
Reasoning and Legal Grounds of the Decision
In its reasoning, the Assembly first examines the employee’s non-compete obligation from a temporal perspective. Accordingly, during the term of employment, the employee is under a duty not to compete with the employer, and no separate agreement is required for this obligation to arise. Indeed, this duty stems from the employee’s duty of loyalty under Article 396 of the TCO during the employment relationship and therefore constitutes an ancillary obligation arising from the employment contract itself.
On the other hand, the non-compete obligation regulated under Articles 444 to 447 of the TCO is considered an independent undertaking by the employee towards the employer that produces legal effects after the termination of the employment relationship. Consequently, this obligation must be separately agreed in writing, and the fact that, in practice, it often appears as a clause in the employment contract does not make it an ancillary obligation attached to the employment contract. Therefore, regardless of how closely related it may be to the employment contract, it cannot be concluded that the non-competition obligation undertaken for the period after the termination of the employment contract arises from the employment contract itself and that the Labour Courts have jurisdiction on this basis.
After distinguishing the temporal scope of the non-compete obligation, the Assembly goes on to examine the relationship between the provisions governing the jurisdiction of labour courts and commercial courts. Under Article 5 of the Labour Courts Act, as a general rule, disputes arising from employment contracts or employment relationships fall within the jurisdiction of the Labour Courts. However, Article 4/1(c) of the Turkish Commercial Code (“TCC”) expressly classifies disputes arising from Articles 444 to 447 of the TCO as “absolute commercial cases”. By comparing these two provisions, the Assembly concludes that the rule under the TCC should prevail, as it is both a special provision (lex specialis) and explicit and direct in its wording.
Furthermore, the fact that the legislature did not amend the relevant provision of the TCC when enacting the Labour Courts Act in 2017 was interpreted as a strong indication of the legislative intent to maintain jurisdiction over disputes concerning non-compete obligations within the Commercial Courts of First Instance. The reasoning also emphasizes that such disputes are often closely linked not to labour law but to matters specific to commercial law, such as the protection of trade secrets, preservation of clientele, and prevention of unfair competition. Therefore, assigning jurisdiction to the Commercial Courts is deemed a more appropriate solution, both in terms of judicial specialization and fairness.
Expected Practical Implications and Evaluation
With this unification of case law it is expected that significant clarity and consistency will be achieved in an area that has long been debated in practice. Following this decision, lawsuits filed pursuant to Articles 444 et seq. of the TCO will now be brought directly before the Commercial Courts of First Instance. This development will largely prevent late-stage rulings of lack of jurisdiction and thereby avoid unnecessary prolongation of proceedings.
Cases that are currently pending before the Labour Courts that involve claims based on non-compete obligations will, in light of this new precedent, be transferred to the Commercial Courts of First Instance through ex officio decisions of lack of jurisdiction. This will prevent cases from circulating between different courts for extended periods and will save the parties valuable time in their pursuit of justice. From this perspective, the decision is of considerable importance in terms of procedural efficiency and expeditious adjudication.
Ultimately, the decision not only clarifies a technical jurisdictional distinction but also enhances legal certainty and predictability for the parties. Employers will now be able to proceed with a clear understanding of which court has jurisdiction, while employees will continue to have the protections under Article 445 of the TCO, retaining the right to request judicial modification of excessive restrictions in terms of duration, territory, or scope. Thus, while the existing safeguards for both employers and employees remain intact, the decision ensures that disputes will henceforth be resolved in a more predictable, swift, and efficient manner.