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.