Restrictive clauses of the employment contract - non-compete clause

A non-competition clause / non-compete clause, non-concurrentiebeding or just concurrentiebeding, are terms used in Dutch employment contracts under which a - former - employee agrees not to pursue a similar profession or trade in direct competition against the employer. Due to the complexity of non-competition clause under Dutch law - and its extensive jurisprudence - it is not possible to address this matter more in detail here. But there are some interesting issues to keep in mind.

Non-competition clause / non-compete clause

The use of such a restrictive clause in the employment contract takes into account that upon their termination or resignation, an employee might start working for a competitor or set up his own business. Using the knowledge gained from his former employer would give him a competitive advantage. Most Dutch judges will deem such a non-competition clause to be legally binding as long as the clause contains reasonable limitations as to the geographical area and time period in which a former employee may not compete. The Dutch courts have held that an individual cannot be barred from carrying out a trade in which he has been trained except to the extent that is necessary to protect the reasonable interests of the former employer. A judge can however annul the non-competition clause when the former employee is disproportionately affected by the clause. A non-competition clause may have become ineffective over time. This can occur if the employee’s job within the company has significantly changed. An employer can also not claim any rights from the non-competition clause if he was at fault in the termination of the employment contract ie the termination was irregular. As the issue of a non-compete clause under Dutch law is fairly complex, it is always wise to seek legal advice before taking any action.

Non-solicitation agreement - relatiebeding

A non-solicitation agreement, relatiebeding, is closely related to the non-competition clause. It is a clause by which an employee agrees not to solicit - or even accept - business from the employer's customers or business relations. It prevents a former employee or his new employer from gaining a competitive advantage by using business sensitive information such as customer / client lists.

Non-disclosure (NDA), confidentiality agreement - geheimhoudingsclausule

A non-disclosure / confidentiality agreement, geheimhoudingsclausule, is used in Dutch employment contracts to prevent an employee from abusing confidential information about a former employer's operations or trade secrets, patents, upcoming products and marketing plans. By using this knowledge a competitor could gain an unfair advantage by headhunting / poaching employees with valuable business information.

Notice - Disclaimer

The information offered on this page is intended for information purposes only. It does not imply a specific advice about your situation nor does it constitute a binding legal relationship with Advocatenkantoor Bolton. As Dutch law is dynamic in nature, we cannot guarantee the actual correctness of the information on this website. For specific advice you can contact us for an appointment by phone +31 45 888 74 64 or by e-mail secretariaat @ advocatenkantoorbolton.nl - -

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Restrictive clauses of the employment

contract - non-compete clause

A non-competition clause / non-compete clause, non- concurrentiebeding or just concurrentiebeding, are terms used in Dutch employment contracts under which a - former - employee agrees not to pursue a similar profession or trade in direct competition against the employer. Due to the complexity of non-competition clause under Dutch law - and its extensive jurisprudence - it is not possible to address this matter more in detail here. But there are some interesting issues to keep in mind.

Non-competition clause / non-compete

clause

The use of such a restrictive clause in the employment contract takes into account that upon their termination or resignation, an employee might start working for a competitor or set up his own business. Using the knowledge gained from his former employer would give him a competitive advantage. Most Dutch judges will deem such a non-competition clause to be legally binding as long as the clause contains reasonable limitations as to the geographical area and time period in which a former employee may not compete. The Dutch courts have held that an individual cannot be barred from carrying out a trade in which he has been trained except to the extent that is necessary to protect the reasonable interests of the former employer. A judge can however annul the non-competition clause when the former employee is disproportionately affected by the clause. A non-competition clause may have become ineffective over time. This can occur if the employee’s job within the company has significantly changed. An employer can also not claim any rights from the non- competition clause if he was at fault in the termination of the employment contract ie the termination was irregular. As the issue of a non-compete clause under Dutch law is fairly complex, it is always wise to seek legal advice before taking any action.