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Non-compete clause

This information is provided by: Netherlands Enterprise Agency

Non-compete clause

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

Content non-compete clause

You can determine yourself 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.

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

Valid non-compete clauses

A non-compete clause is only valid if:

  • it is agreed upon in writing, for instance in their signed employment contract or in your general conditions
  • your employee is 18 years old or over
  • your underage employee has parental permission

Void non-compete clauses

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, which should be specified explicitly in the employment contract.

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, they may decide the clause is (no longer) applicable.

This information is provided by:

Netherlands Enterprise Agency

This article is related to:

Any further questions?

Netherlands Enterprise Agency +31 (0)88 602 44 44