The principle of the right to freedom of movement is laid down in a number of international treaties such as the European Social Charter and the International Convention on Economic, Social and Cultural Rights as well as in the national Constitution. This principle, together with the principle of freedom of contract, conflicts with non-competition clauses, which are defined in the NCC as stipulations between employers and employees by which the employee is restricted in accepting other employment after his contract of employment has come to an end.
Non-competition clauses aim to protect the employer from any infringement by the former employee of the employer’s economic interests, such as the application of know-how. If there is no written agreement or the employee had not yet reached majority of age when the contract was concluded, a non-competition clause will be deemed void and the employer will not be able to derive any rights from it.
The activities which an employee is prohibited from carrying out must be described as clearly as possible and the prohibition must be limited to a certain period of time. A period of one year is usually deemed acceptable. A non-competition clause must also define the territory within which the former employee is prohibited from carrying out those activities.
The courts have the power to limit the scope of a non-competition clause or to set it aside altogether regardless of whether it is legally valid. This power may be exercised if the employer has no interest in maintaining the non-competition clause or if the employer’s interest in maintaining it carries less weight than the employee’s in having it limited in scope or set aside. In addition, the court has the power to order the employer to pay the employee compensation for the duration of the period in which he wishes to enforce the non-competition clause.
As stated above, an employer cannot derive any rights from the non-competition clause if he has terminated the employee’s employment in an irregular manner, that is to say, without having given notice or without due observance of the provisions applicable to termination.
It is not possible to address in detail Dutch labor law. Due to the complexity of the system it is wise to seek professional assistance prior to any measure envisaged.
For further information regarding Dutch employment law, please contact our labor law lawyer Mr Erik Jacobson.