With as many as 3.1 million workers bound by a non-compete clause, there is a good chance that you too want one, several, or all of your employees to be bound by it in your employment contract. Usually this is done in the form of a “standard provision.”

For a long time there has been talk about change, but it is now coming. And with standard provisions, you will no longer get there.

The legislative proposal that went out for internet consultation on 4 March 2023 has significant amendments in store. Responses may still be submitted over the coming six weeks.

So what exactly is being tightened up?

1. A non-compete clause can remain in effect for a maximum of one year after the end of an employment contract, otherwise it is void.
2. The specific geographic scope within which the employee may not perform work as a result of the non-compete clause must be explicitly stated;
3. The specific justification for the non-compete clause (think of a compelling business or service interest) must be provided for every employment contract, including contracts for an indefinite period. Without justification, the non-compete clause is void.
4. When invoking the non-compete clause, the employer must pay the employee compensation. This compensation amounts to 50% of the last-earned monthly salary for each month that the non-compete clause is in effect. For example: if the clause is invoked for 6 months, the employee is entitled to compensation equal to 3 months’ salary.
5. No later than one month before the end of the employment contract, the employer must inform the employee whether they will be held to the clause and for what duration. The compensation must then actually be paid for that duration.
6. Transitional law will apply to employment contracts with a non-compete clause that have already been concluded.

We will of course keep you informed of developments. If you would like to know more or anticipate this now, please contact The Legal Company via info@thelegalcompany.nl or call 020 345 0152.

Nothing is as changeable as legislation and regulation. Please note that our blogs may no longer align with current legislation and regulations and may therefore be outdated. If you have questions or a problem relating to this blog, or if you require legal assistance, please contact us.