Rules for using a non-compete clause tightened

For whom?

• entrepreneurs with employees

What changes?

Do you have staff and do you use a non-compete clause when an employee leaves your company? More and more often contracts contain non-compete clauses for no good reason. This makes it harder for employees to change jobs and for employers to find people. The rules for the non-compete clause will therefore be tightened:

• A non-compete clause can apply for no longer than 1 year after the employment agreement has ended.
• You must specify and justify the geographical area in which the employee is not allowed to work due to the non-compete clause. 
• You must explain to all employees why it is necessary to have a non-compete clause in a permanent contract (substantial business interest), and not just for temporary contracts as is currently the case.
• If you use a non-compete clause, you must compensate the employee.
• The compensation is half of what the employee earned in their last month of work, for each month the non-compete clause is in force. For example, if the non-compete clause is in place for 6 months, the employee is entitled to a compensation amounting to 3 months' salary.

When?

The effective date of this change to Article 653 of Book 7 of the Civil Code is not yet known.