News article | 02-06-2023 | 15:00
Employees are increasingly bound by a non-competition clause. This means that after their contract ends, they are not allowed to perform the same type of work at a competing company. This restrictive rule is there to protect the business interests of employers. But this restriction is often not justified, according to research. This makes it less easy for employees to change jobs and employers find people less easily. The firm therefore decided to modernize the non-competition clause.
Minister van Gennip for Social Affairs and Employment: “A non-competition clause may be necessary to protect trade secrets or business relationships, for example. But today we see that contracts increasingly contain a non-competition clause as standard, when there is no valid reason for this. This is unnecessarily burdensome for employees and hinders progress on the labor market. This is why we are going to reform the rules of the non-competition clause.
More clarity
The government wants it clarified in advance when a non-competition clause can be included and invoked by an employer. It also avoids going to court. That is why Minister Van Gennip intends to draw up the following changes in a bill:
- The non-competition clause is legally limited in its duration;
- The non-competition clause must be geographically delimited, precise and reasoned in the contract;
- In open-ended contracts, the employer must demonstrate the predominant commercial interest of a non-competition clause (this is already the case for fixed-term contracts);
- If an employer holds a departing employee to the non-competition clause, the employer must pay compensation to the employee. This will be a legally determined percentage of the last salary earned. Such compensation allows employers to think carefully before including and invoking the non-competition clause.
Research
A study conducted by the research agency Panteia shows that one in three employers uses a non-competition clause, almost always as a standard clause in the contract. There is not always a good reason for this, for example because the employee does not have access to sensitive relationships or information. In the meantime, this can have a deterrent effect, so that employees do not dare to switch to another employer. It is estimated that 3.1 million employees are bound by a non-competition clause. The draft law aimed at improving this situation should be consulted on the internet at the end of 2023.