Non-compete clause

This information is provided by

Netherlands Enterprise Agency, RVO

You can include a non-compete clause in your employee’s employment contract to protect your business interests when they leave your employment. This clause prevents them from working for your competitor or from starting a similar enterprise after resigning. A non-solicitation clause forbids your employee to contact your clients after resigning.

Non-compete clause for permanent or fixed-term contract

You may only include a non-compete clause in a permanent contract. You may not include a non-compete clause in a temporary employment contract, unless special circumstances apply. This could be the case when 'legitimate business interests' are at stake. You must specify these business interest explicitly in the employment contract.

Voiding a non-compete clause

Your employee could ask the district court if the non-compete clauses in the contract are truly necessary and legitimate. If you fail to properly substantiate the non-compete clauses, the district court may void the clauses.

Non-compete clause versus non-solicitation clause

A non-solicitation clause is a reduced type of non-compete clause. With a non-solicitation clause you protect your client base, suppliers, and other business relations. After dismissal an ex-employee cannot contact your clients or take your customer base with them. Your ex-employee is also not allowed to work for your clients or business relations. They may start work for your competitor, if your competoitor is not a business relation of yours.

You may only include a non-solicitation clause in a fixed-term (temporary) contract if you specify the need for a non-solicitation clause clearly in the employment contract.

What does a non-compete clause include?

You can determine what to include in the non-compete clause. It may contain provisions such as:

  • The kind of work it applies to.
  • Competitors you do not want your former employee to work for.
  • Restrictions on geographical areas.
  • Applicable time period, usually 1 or 2 years after resignation.
  • Possible penalties.

The non-compete clause may not limit your employee unreasonably. The clause must be clear on what is and what is not allowed.

Please note: Do not forget to amend the non-compete clause when the employee changes position or if other major changes take place. For example, if your employee is given a management position with more responsibilities. Or if you expand your territory or the number of branches.

When is a non-compete clause valid?

A non-compete clause is only valid if:

  • it is agreed upon in writing, for instance in a employment contract or in the employment conditions
  • your employee agrees in writing to this clause. For instance by signing the contract, or a letter which refers to your employment conditions
  • your employee is 18 years old or over
  • if your employee is a minor he or she has parental permission

Failure to comply with the non-compete clause

If your employee fails to comply with the non-compete clause, you can go to court. The court may force your employee to comply with the clause by imposing a penalty. You may also claim damages. The court will also take your employee’s interests into account. In doing so, it may decide the clause is not applicable (anymore).

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Please contact the Netherlands Enterprise Agency, RVO

This information is provided by

Netherlands Enterprise Agency, RVO