Non-compete clause = any clause that limits the employee to seek other employement.
Business relations clause or anti-poaching clause are also non-compete clauses. The same rules apply to these clauses.
CONCLUDING A NON-COMPLETE CLAUSE
Always applicable requirements:
- Must be concluded in writing (can be per e-mail)
- Often linked to a penalty clause
- The employee must be an adult
Temporary contract non-compete is an exception: necessity must be explained in the clause (why is a non-compete clause required for this particular position, and what's the companies' specific interest for it?) It's necessary to include the clause in every (subsequent) temporary contract and every contract needs to be signed. If these requirements are not met, the clause is not valid.
Indefinite contract non-compete clause may be entered into
If the employee gets promoted, the clause might lose it's applicability. Concluding a new non-compete clause may be necessary
Proper drafting of the clause is very important: if unclear, the benefit of the doubt will be for the employee
APPLICATION AND ENFORCEMENT OF NON-COMPETE CLAUSE
An ex-employee starting a competing business or taking employment at a competitor, may not be allowed to do so due to the clause. In principle, a Court will honor the applicability of the clause. The employee ignoring the clause is liable towards the ex-employer and may have to pay damages or a penalty.
If the employee has an interest in the new employment that supersedes the interest of the employer (for instance a career opportunity that the employee would never get at the ex-employer), this may affect the applicability and enforceability of the clause.
The Court may also limit duration or the scope (to for instance 6 months, or an application to just the Amsterdam region).
A non-compete clause is generally not enforceable after dismissal initiated by the employer (an exception is liable behavior of the employee that led to the dismissal).
If the Court decides that the clause remains applicable notwithstanding the clear interest of the employee to make a career move at a competitor, it can award the employee compensation (to be paid by the employer) during the applicable period
Note: this page only includes general information and does not qualify as legal advice. Consequently, no right can be derived from this publication. For advice as to specific situations and cases, please contact us.