Internet consultation bill tightening non-competition clause | News item

News item | 04-03-2024 | 00:00

The non-competition clause is being tightened. Companies can thus protect their competitively sensitive interests while at the same time preventing unnecessary use of the non-competition clause. Minister Van Gennip of Social Affairs and Employment regulates this in the Bill for modernization of non-competition clauses. This law will go into internet consultation today, and those involved have six weeks to respond.

It is estimated that more than a third of all employees have a non-compete agreement. This means that there are restrictions in their employment contract when leaving for the next job. For example, a worker may not work for a number of competitors for a certain period or must otherwise pay a sum of money. Taking out a non-competition clause should prevent employees from taking crucial information, such as trade secrets or customer files, that could harm the company.

However, a large group of employees bound by a non-compete clause do not have access to this type of information at all. In practice, there is a lot of improper use of the non-competition clause. For example, employers often use it to prevent scarce staff from leaving for a competitor. Or just to be sure. This unnecessarily hinders employees in their labor mobility. It also affects the right that you, as an employee, can decide for yourself where you work.

Minister Van Gennip therefore wants to reduce the number of non-competition clauses and restore the balance between employer and employee, as well as legal certainty. While at the same time, companies that really need the non-competition clause can continue to use it.

The modernization of the non-competition clause means, among other things, that the non-competition clause may be applied for a maximum of one year. This bill also requires an employer to always justify which compelling business and service interests exist for concluding the non-competition clause. And the employer must pay a mandatory compensation to the employee if he invokes the non-competition clause.

Following the Van Oostenbruggen/Patijn Motion, the cabinet will explore, also as information for the new cabinet, whether non-competition clauses can be prohibited up to a minimum salary limit (1.5 average). The commitment to the House of Representatives is that this exploration will be completed before next summer.

Internet consultation bill