Most permanent employment contracts include a non-compete clause. This clause determines that you are not allowed to work for a competing company for a certain period of time within a certain region. The wording of a non-compete clause is often very broad. This means there is a high chance that a non-compete clause will be a problem when you want to apply for a job with a new employer. Especially if you work in a small and specialised industry.
In this article, I will explain what you can do if you want to work for another employer that falls under the scope of your non-compete.
1. Is the clause legally valid?
Dutch law lists the requirements that a non-compete clause must meet to be legally valid: it must be in writing and the employee must be over the age of 18.
2. Legal action
It is possible to take legal action and ask the court to terminate the non-compete clause. The court can then dismiss the non-compete and set it aside completely or partially. In the case of partial termination, for example, the term for which the non-competition agreement was agreed upon can be shortened.
The judge will determine whether you can be held to the non-compete clause. The court will assess whether you would be unfairly disadvantaged by the non-competition clause in relation to your employer’s interest to be protected. The retention of employees may not in itself be part of your employers’ interest to be protected. The non-compete clause is designed to protect the employer’s business assets from impairments The mere fact that an employee goes to a competitor does not automatically mean that business assets are also affected.
When determining whether the non-compete clauses should be (partly) waived, the judge weighs the interests of you and your employer. The judge will look at all the circumstances of the situation, for example:
- the degree of attachment to the industry;
- the possibility of a position improvement for you;
- your personal circumstances (family/living conditions/affiliation to region);
- the investments that your employer has made in you;
- the question of who initiated the termination;
- whether your new position involves a lot of competition-sensitive knowledge.
Besides this, the judge also looks at how broadly the non-compete clause is worded. In the case of a very broadly worded non-competition clause, the judge will more quickly rule that it must be annulled.
My advice is not to violate the non-compete clause without your employer’s consent. Especially considering that there is probably a penalty clause applicable. And do note that the penalty is due as soon as you breach the non-compete.
It is good to talk to your employer first. In practice, we often see that an employer is willing to (partly) waive the clause. You can then also refer to your interests. If this doesn’t work, you could start court proceedings and ask a judge to waive the non-compete clause.
Would you like to discuss anon-compete clause or do you have another legal question? Please do not hesitate to contact me directly.