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A properly formulated non-compete clause could protect your business

The Legal Expat Desk (LED) is an information hub by GMW Advocaten, advising the expat community in the Netherlands since 2006.

A non-compete clause is a clause in a work contract that states that one party (employee) can't enter into or start a similar profession or trade in competition against another party (employer).

The non-compete clause is often a topic of idle chat. The employee sometimes thinks that signing a non-compete clause will not do any harm as the employer is not going to hold him or her to it at the end of the employment contract.

Employers sometimes include a "standard" non-compete clause that eventually does not have any value because the employer has no interest in upholding it. But they should note that a non-compete clause could add real value to their business.

Proper substantiation and formulation

You may find that your best employee moves to a competitor, along with knowledge, contacts and services. In this case, it would be beneficial to have a properly substantiated and formulated non-compete clause included in the contract. 

It must clearly state why it is required for the protection of your business to bind this particular employee, or group of employees, to a non-compete clause.

Non-compete clause in temporary employment contracts

Since January 1, 2016, the law has restricted non-compete clauses in temporary employment contracts.

However, a ruling at the beginning of August by the Court of Appeal Arnhem-Leeuwarden showed that you can also successfully prohibit an employee with a fixed-term contract from working for a competitor.

So, it is also possible to include such a clause in a temporary employment contract.

Avoid risking your business

It is important that as a business owner you obtain appropriate advice on the inclusion of a non-compete clause in the employment contract of a new employee.

This ensures that your non-compete clauses are upheld and do what they are supposed to do: protect your business.

Koen Vermeulen is a specialist in Private Employment Law and Public Civil Service Law at GMW Advocaten / Legal Expat Desk.

Koen

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Koen Vermeulen

Koen Vermeulen is your sparring partner for all questions relating to employment relations and pension. He has more than ten years of consultancy and litigation experience in private employment law...

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