A non-compete clause can cause a lot of uncertainty. Perhaps you want to change jobs, but your contract states that you cannot work for a competitor. You wonder: Is this allowed and what are my options? A non-compete clause can cause a lot of uncertainty. Perhaps you want to change jobs, but your contract states that you cannot work for a competitor. You wonder: is this allowed and what are my options?
Fast forward to
What is an unsecured clause?
When is a non-compete clause valid?
When does non-compete clause expire?
Non-competition clause in a temporary contract
Competition clause as self-employed
Non-competition clause in case of dismissal
Circumventing a non-compete clause: is this possible and allowed?
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Frequently asked questions about the non-compete clause
What is a non-compete clause?
A non-compete clause is an agreement in your employment contract stating that you will not be allowed to work for a competitor or start a competing business after your employment ends. Its purpose is to protect your employer's interests, e.g. company information or customers.
Such a clause may limit your ability to accept a new job. Therefore, there are legal rules governing when a non-competition clause is valid and how far it may go.
What is the difference between a non-compete clause and a non-solicitation clause?
A non-compete clause prohibits you from working at a competing company or starting a competing business yourself. A non-solicitation clause is more specific and prohibits you from having contact with customers or relations of your employer, for example to take them over to your new employer.
When is a non-compete clause valid?
A non-compete clause is not automatically valid. A number of legal conditions must be met. For instance, the clause must:
- be in writing in your employment contract;
- have been agreed with an adult employee (18+);
- in principle be part of an open-ended employment contract;
- in the case of a temporary contract are valid only if the employer gives clear and concrete reasons.
In addition, a non-compete clause must not unreasonably restrict your ability to find a new job. In some cases, a court can therefore annul all or part of the clause.
When does non-compete clause expire?
A non-competition clause does not always remain automatically valid. In certain situations, the clause may expire or be declared (partially) invalid. This may be the case, for example, if:
- your position changes dramatically, making the clause more onerous for you;
- the clause unreasonably restricts you from finding other work;
- the employer does not (or no longer) have a compelling interest in the clause;
- the court annuls the clause in whole or in part;
- there is no valid justification in a temporary contract;
- the agreed duration of the non-competition clause has expired.
In addition, in practice, a non-competition clause can also lapse or be amended when you agree on it upon dismissal, for example in a settlement agreement.
Non-competition clause in a temporary contract
In a temporary contract, a non-competition clause is in principle not allowed. The law imposes strict requirements on this, as temporary employment is inherently insecure for the employee.
A non-competition clause is only valid if the employer provides written and concrete reasons as to why it is necessary because of important business interests. In practice, this justification is often lacking or too general.
Is no proper substantiation included? Then the competition clause is usually not legally valid and you do not have to comply with it.
Competition clause as self-employed
Whether a non-competition clause continues to apply when you start working as a self-employed person depends on the agreements you made previously and the nature of your work. In some cases, the clause will continue to apply, but there are also situations where there is room for it to lapse or be limited. In particular, if you want to continue working as a self-employed person within the same field after your employment, the non-competition clause may come into play.
Non-competition clause in case of dismissal
Whether a non-competition clause continues to apply depends on how the employment ends. In some cases, the clause remains in full force, but there are also situations where there is room for it to lapse or be amended.
In particular at dismissal by mutual agreement (a settlement agreement), the non-competition clause regularly becomes part of the negotiation. Employers are often willing to relax or drop the clause, for example in exchange for other agreements.
Therefore, always get proper advice before agreeing to dismissal. A non-compete clause can have a big impact on your next move.
Circumventing a non-compete clause: is this possible and allowed?
Many employees wonder whether they can circumvent a non-compete agreement. The short answer: no, circumvention is not. That term is actually not quite right. The point is not to circumvent the clause, but to see if it can be amended, limited or not valid.
What is allowed?
There are several ways to deal with a non-compete clause without violating it:
- You may negotiate with your employer to have the clause waived, limited or surrendered.
- In a settlement agreement (VSO), it can be agreed that all or part of the clause will lapse.
- If the clause is legally invalid, you do not have to abide by it, e.g. if there is no justification in a temporary contract.
What is not sensible?
Knowingly ignoring or evading a non-compete agreement can have major consequences:
- Ignoring the clause “secretly” can lead to a fine, compensation claim or summary proceedings.
- Working through a sham construction can still be seen as an offence if a judge looks through it.
- Just using a different job title, entity or place of business is often insufficient if your operations remain the same in practice.
Get legal advice from our employment lawyer
Are you unsure whether a non-compete clause is valid in your situation or want to know what your options are? Our employment lawyer looks with you and gives clear advice on your position and the steps you can take.
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My name is Robin Sieverdink, employment lawyer specialising in dismissal cases and settlement agreements. A non-compete clause can severely limit your next move. You may want to accept a new job, but do not know what is and is not allowed.
In such a situation, it is important to get clarity. I assess your non-competition clause and see whether it is valid and what your options are. In doing so, I look not only at the legal rules, but also at what it means for your career, your income and your negotiating position.
Want to know where you stand and what is wise in your situation? Call or WhatsApp via +(31) 085-08 054 82 or send an e-mail to info@legalworx.nl.
