30 April 2025
Facing redundancy in the Netherlands?
If you’re employed by a corporation in the Netherlands and are facing redundancy, this article provides practical advice on how to navigate the situation.
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16 April 2024
The non-compete clause is not ‘set in stone’. In practice we see many conflicts and proceedings about the non-compete clause, especially in the current tight labour market.
The legislature is taking action: a legislative proposal is likely to follow in late 2023 with the aim of limiting non-compete clauses and giving both the employer and the employee more clarity in advance. This would ease restrictions on workers changing jobs, while employers would still have plenty of options to protect company assets.
The outgoing cabinet will continue preparations for this amendment to the non-compete section of the law (Article 7:653 of the Dutch Civil Code (Burgerlijk Wetboek)). The fact is that the Lower House does not want the issue to be controversial. What potential effect could this have for the non-compete clause?
In 2006, a similar proposal to amend the non-compete clause regulations was defeated in the Upper House. Given the current political situation, the issue is whether the changes currently being announced will materialise. But at least the outgoing cabinet can continue preparing and tabling the legislative proposal. This will most likely take place by the end of the year.
In the meantime, we see a lot of discussion and also litigation between employers and employees about non-compete and non-solicitation clauses. This may be related to the fact that in times of scarcity, employers may want to use the non-compete clause as a ‘loyalty clause’, i.e. to prevent an employee from leaving the company. The Supreme Court (on 17 June 2022) and earlier lower courts have made it clear that retaining employees cannot and should not be the objective of and reason for invoking a non-compete clause. A non-compete clause is intended to protect the employer’s market position: its business assets, know how, good will, trade secrets and business relationships.
It is precisely to emphasise this importance and to avoid ambiguity or controversy with the employee that it is wise for employers to extensively motivate the importance and necessity of a non-compete clause in employment contracts. In other words, instead of a succinct generic non-compete clause, it is wise to emphasise the company’s interests in relation to the employee’s person, position and specific knowledge of the company. Ultimately, a discussion about the validity, suspension or annulment of a non-compete clause always involves a balancing of interests. We are happy to advise you on how to be best prepared for this! Of course, we will also keep you updated on the upcoming legislative proposal to restrict the non-compete clause.
If you have any questions or would like more information, please do not hesitate to contact us. Our labour lawyers are ready to help you.