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A non-compete clause prohibits an employee from working for a competitor or competing after their employment ends. It is only valid if agreed upon in writing with an adult employee and, in the case of a temporary contract, is furthermore justified by a compelling business interest (Article 7:653 of the Dutch Civil Code).
What does a non-compete clause prohibit?
A non-compete clause restricts the employee's freedom after the termination of the employment contract: he may not then join a competitor or start a competing business, often within a specific area and for a certain period. It protects your customers, knowledge, and investments.
When is the clause valid?
The law sets requirements (Article 7:653 of the Dutch Civil Code): the clause must be agreed upon in writing with an adult employee. In a fixed-term contract, it is only valid if you provide written justification for the compelling business interest that makes the clause necessary. If that justification is missing, the clause is not valid.
The judge can limit the clause
Even a valid non-competition clause can be mitigated or annulled by the court if it unfairly disadvantages the employee in relation to your interest. A clause that is too broad—in duration, geographical area, or scope—runs that risk. A clearly defined, well-substantiated clause is stronger.
A lighter variant: the non-compete clause
If you only want to prevent the employee from taking your clients, a non-compete clause is often more appropriate and likely to succeed. It does not prohibit every form of competition, but only approaching or working for your business relations.
Frequently Asked Questions
Is a non-compete clause allowed in a temporary contract?
Only with written justification of a substantial business interest. Without that justification, it is not valid.
Can an employee get out of the clause?
Sometimes yes: through moderation or annulment by the court, or if the clause does not meet the statutory requirements. You can also agree to the lifting yourself.
How long may a non-compete clause last?
There is no fixed maximum, but an excessively long duration increases the likelihood of moderation. A limited, reasonable period holds up best.
A non-compete clause that holds up?
Our legal experts draft a non-competition clause and incorporate it into your employment contract. View our employment lawteam or schedule a free consultation.
