The overriding interest: the non-compete clause under the microscope 🔎

Dennis

Concurrentiebeding contract

Recently, the Central Netherlands District Court again emphasised the weighty interest in the non-competition clause. The subdistrict court ruled that the non-competition clause in the fixed-term employment contract was not legally valid because the employer did not comply with the obligation to state reasons. 

In a fixed-term employment contract, an employer must clearly and specifically substantiate why a non-competition, non-solicitation or anti-harassment clause is necessary because of important business interests. In principle, a general enumeration that may apply to every company is not sufficient for this purpose.  So what, among other things, must the motivation satisfy? The subdistrict court indicated that it must concern:

  • the employer's interest in maintaining the clause;
  • the clause must be genuinely focused on that employee's job and the work within that job;
  • the employer's specific business information, knowledge and experience to be acquired must be stated, which would actually jeopardise the employer's business flow if employee does not comply with the clause.

In this case, the non-competition clause was based on a general enumeration of interests without specific consideration regarding the employee's position and work. The subdistrict court stressed that a concrete link to substantial business interests is needed to justify such a clause. Thus, the employer's business interests must actually be at risk if the ex-employee joins a competitor. Thus, in the present case, the employer had not fulfilled its duty to state reasons, as there was no evidence of an impairment of the employer's commercial business flow. As a result, the clause was null and void. 

So pay close attention to the difference in legal effect. If the clause is well motivated and states the above, but a subdistrict court considers that an employee's interests outweigh the employer's interests in not maintaining the clause, then the clause is voidable (in whole or in part). An employee must appeal to that. If the clause is not properly motivated and therefore does not actually meet the requirements, the clause is void and therefore not legally valid.

For now, the weighty interest only applies in the case of a competition, relationship and/or anti-solicitation clause in a fixed-term employment contract. The government wants to change this. With the bill Modernising the competition clause, the government wants to, among other things:

  • limit the duration of the non-competition clause;
  • the inclusion of a geographical scope will become mandatory;
  • compensation for employees held to the clause; and
  • The weighty business and or service interest for the clause must be justified in all employment contracts. This then applies to both fixed-term and open-ended employment contracts. 

These changes aim to improve the balance: employers should protect their business interests, but employees should also have the freedom to pursue their careers. 
This bill is now on the shelf for January 2026, so you still have some time to take a good look at your non-competition, non-solicitation and/or anti-solicitation clause, and, above all, do not forget the weighty business interest. 

If you doubt whether your non-competition, non-solicitation and/or anti-solicitation clause is legally tenable. Please contact Dennis Oud, Tessa Sipkema, Tim van Riel or Elke Hofman-Bijvank

You can find the link to the ruling here

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De Haij & van der Wende

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Dennis Oud

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Erwin den Hartog

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Fleur Huisman

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Petra Lindthout

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Tessa Sipkema

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Gerard van der Wende

Administrative law and Family law
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Elke Hofman-Bijvank

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Tim van Riel

Employment law
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Iris Keemink

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