Summary proceedings
There is often urgency in answering the question whether an employee is or remains bound by a non-solicitation or non-compete clause and therefore may move to a client or competitor. Conducting a “normal” set of proceedings, a full trial, may then take too long. Instead, summary proceedings can be brought. These are dealt with more quickly, but the decision the judge makes in such proceedings is provisional. The decision is, however, immediately enforceable. If either party starts full proceedings after the decision, the interim relief judge’s decision can be overturned.
The case
The facts of this case are relatively straightforward. The employee had signed a valid non-compete and non-solicitation clause, but wanted to join a competitor. The parties had already been negotiating, during which the employer had promised that the employee would be allowed to take up the position with the competitor. The employee would still be restricted in his new role because he would have to work with the employer’s clients. The judge took a pragmatic view and limited the non-solicitation clause. So that the employee was only prohibited from taking clients or business relations away from his former employer. The confidentiality clause would further sufficiently protect the employer’s pricing, as well as the names of clients and client contacts.
Promise
Although the content of the negotiations between employer and employee does not appear from the judgment, the judge took into account, when considering whether the non-solicitation and non-compete clauses should remain in force, that the employer had promised that the employee could make the move to the competitor, subject to conditions. The balancing test as to whether a non-compete clause is necessary to protect the employer’s business interests will then quickly turn against the employer. Because the employer’s own promise can be interpreted as indicating that it no longer considered the non-compete clause necessary. If negotiations collapse for whatever reason, this judgment shows that such a promise cannot always simply be withdrawn.
Compensation for loss of income
Where an employee is restricted from moving to a competitor by a non-solicitation or non-compete clause, the law allows the court to award compensation. Such compensation may be awarded if the employee is significantly restricted in finding work elsewhere. The amount is determined by the court.
In the majority of cases in which such compensation is requested, the court rejects the request. In this case, however, the court did award compensation, equal to 50% of the salary the employee earned with his employer, for the period during which the employee was without work. In this case, that was 1.5 months.
At the beginning of 2024, a bill was introduced to amend the rules on non-compete clauses. Among other things, this proposal provides that an employer must pay an employee compensation of 50% of salary for the period during which the employer wishes to enforce the non-compete clause after termination of employment. The bill is still under consideration and must still be approved by the House of Representatives and the Senate. Although the judge goes into detail as to why the compensation was awarded, the decision raises the question of whether, in light of the bill, judges may in future more readily award such compensation. Time will tell.
More information
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District Court of Zeeland-West Brabant, 27 May 2025, ECLI(verkort):3596
This article was previously published in Rendement.