Competition clause

An organisation may have a major interest in certain employees not being employed by a competitor in the future. A non-competition clause offers a solution. With a non-competition clause, an employer can prohibit an employee from working for a competitor for a certain period of time or from setting up his own company that (directly) competes.

Formulation and legal requirements

It regularly happens that a non-competition clause has not been properly negotiated or has been incorrectly formulated. As a result, a court will later be able to set aside the non-competition clause in whole or in part. Just as with the relationship clause, the law imposes two formal requirements on the non-competition clause, namely: (1) the employee's age of majority; and (2) agreement in writing. Furthermore, it is very important to clearly formulate the non-competition clause. It must be clear to the employee what he may and may not do. If the wording is unclear, an employee's interests will soon be harmed.

Job change and non-competition clause

When an employee takes up a new position, the current non-competition clause must be critically examined. If there is a drastic change in the employment relationship, as a result of which the non-competition clause will weigh more heavily on the employee, the non-competition clause must again be agreed in writing.

Duration and (geographical) scope

The law does not impose any requirements on the duration and (geographical) scope of the non-competition clause. In principle, therefore, there are no restrictions. However, a court is competent to restrict the non-competition clause if it finds that the clause is too broad in duration and/or (geographical) scope and is therefore unreasonable. We therefore recommend always taking a critical look at the duration and (geographical) scope. To give you an idea: it follows from current case law that, in general, a non-competition clause for the duration of more than one year will not last. With regard to the (geographical) scope of the non-competition clause, it follows from current case law that that scope should generally be related to the working area in which an organisation is active. However, every situation is different, so we recommend seeking advice from a legal expert.

Also allowed in case of a temporary contract?

The basic principle is that a non-competition clause is not permitted in the case of a fixed-term employment contract. However, there is an exception for cases in which the non-competition clause is necessary for an employer in the context of important business or service interests. The concrete nature of these interests must always be justified in a temporary contract. Without this justification, the non-competition clause in a temporary contract is in any case not valid (null and void). Even if a statement of reasons is included, a judge may still decide to nullify the clause. We therefore recommend that you always consult a legal expert for the wording of the reasoning.

Contact us

As you have read above, it is important to be critical when drafting or accepting a non-competition clause. We at Blatter Legal assist employers and employees with appropriate advice. Feel free to contact us for more information. We are at your service.

Specialist competition clause

Diane Renders

Diane Renders

A well formulated non-competition clause ensures clarity for both parties and avoids surprises afterwards.
Diane Renders - Specialist

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