Rules for using a non-compete clause tightened

What changes?

Do you have staff and do you use a non-compete clause when an employee leaves your company? More and more often contracts contain non-compete clauses for no good reason. This makes it harder for employees to change jobs and for employers to find people. The rules for the non-compete clause will therefore be tightened:

• A non-compete clause can apply for no longer than 1 year after the employment agreement has ended.
• You must specify and justify the geographical area in which the employee is not allowed to work due to the non-compete clause.
• You must explain to all employees why it is necessary to have a non-compete clause in a permanent contract (substantial business interest), and not just for temporary contracts as is currently the case.
• If you use a non-compete clause, you must compensate the employee.
• The compensation is half of what the employee earned in their last month of work, for each month the non-compete clause is in force. For example, if the non-compete clause is in place for 6 months, the employee is entitled to a compensation amounting to 3 months' salary.

For whom?

• entrepreneurs with employees

When?

The effective date of this change to Article 653 of Book 7 of the Civil Code is not yet known.

Please note: The effective date of this measure is not yet final. Entry into force is subject to its passing through the Lower and Upper Houses (Tweede en Eerste Kamer) of parliament. After publication in the Staatsblad or Staatscourant (Government Gazette, in Dutch) the law can take effect.