{"id":31563,"date":"2026-10-15T11:06:19","date_gmt":"2026-10-15T11:06:19","guid":{"rendered":"https:\/\/thelegalcompany.nl\/?p=31563"},"modified":"2026-10-19T12:33:02","modified_gmt":"2026-10-19T12:33:02","slug":"error-settlement-agreement-severance-payment","status":"publish","type":"post","link":"https:\/\/thelegalcompany.nl\/en\/error-settlement-agreement-severance-payment\/","title":{"rendered":"All cards on the table? Error in a settlement agreement (VSO)"},"content":{"rendered":"

A settlement agreement (in Dutch: vaststellingsovereenkomst, or VSO) is often used to end an employment relationship by mutual agreement. During the negotiations on the terms, the termination payment is often a key point. But what if you award a termination payment and it later turns out that the employee deliberately withheld important information? A recent ruling by the District Court of Amsterdam shows that such an employee can pay a high price[1]<\/a>.<\/p>\n

Severance payment of \u20ac500,000<\/strong>
\nAn employee in a management position concluded a settlement agreement with his employer and was awarded a termination payment of \u20ac500,000. In that agreement, he explicitly declared that he had not withheld any facts that could have influenced the payment. That same day, the CEO warned him by email that he suspected staff were being poached: “I will come at you HARD if you raid my company”. <\/em>He denied this and the settlement agreement was signed.<\/p>\n

Shortly before and a few days after, a total of nine employees who worked under his management terminated their employment contracts with the employer. They joined a new, competing company of which their former manager was the sole director. He was summoned to stop acting unlawfully and in breach of the confidentiality, non-solicitation and non-dealing clauses. The (former) employer went to court and claimed penalties for breach of these clauses, as well as repayment of the \u20ac500,000 termination payment on the grounds of error (dwaling).<\/p>\n

Error in a settlement agreement<\/strong>
\nError is governed by Article 6:228 of the Dutch Civil Code. The subdistrict court summarises the standard as follows:
\n“The court can change the consequences of an agreement if it was concluded under the influence of error and would not have been concluded if the facts had been correctly represented.”<\/em>
\nA claim based on error is excluded where it concerns a purely future circumstance, or where, according to generally accepted views, the error should remain for the account of the party in error. The crucial question is therefore: who should have informed whom?<\/p>\n

The duty to disclose prevails over the duty to investigate<\/strong>
\nThe employer already had a suspicion (the warning email), but the court ruled that this did not stand in the way of a successful claim based on error. The employee’s duty to disclose takes precedence over the employer’s duty to investigate.
\nThe decisive factor was that the (former) employee, given his senior position and the size of the payment, had actively denied the suspicion instead of putting his cards on the table. The court ruled that the employer would not have paid the termination payment had it known the truth. The \u20ac500,000 therefore had to be repaid.<\/p>\n

Proper wording is crucial<\/strong>
\nNot all claims succeeded. The non-solicitation clause was rejected in full because it only covered recruitment by the employee himself, not employment with a company of which he was a director. That lack of clarity was at the employer’s risk. The confidentiality clause also failed for lack of evidence. Only the non-dealing clause, thanks to WhatsApp evidence, resulted in a penalty of \u20ac25,000.<\/p>\n

Lessons for your settlement agreements and employment contracts<\/strong>
\nAn integrity clause in the settlement agreement is indispensable: it is the instrument that allows you to reclaim money afterwards if an employee conceals the impending departure of colleagues or competing plans.<\/p>\n

In addition, have your non-competition, non-solicitation, non-dealing and confidentiality clauses reviewed periodically. Clauses that do not take specific situations into account, such as director structures or indirect recruitment, often lose their value in practice.<\/p>\n

When a manager or key figure leaves, ask specifically about competing plans and record this in the settlement agreement.<\/p>\n

Document suspicions immediately: emails and signals that point to irregularities strengthen a later claim based on error.<\/p>\n

Prevention is better than cure<\/strong>
\nIn practice, we regularly see employment documentation that has not been worded carefully enough. The consequences can be very costly: penalties that cannot be collected, payments that cannot be recovered, or proceedings that are lost on a detail in the text.<\/p>\n

These kinds of costly consequences can be avoided with a careful approach in advance. Have your settlement agreement checked legally for each individual case, and have the restrictive clauses in your employment contracts reviewed in good time, before you need them. Contact us to assess the state of your documentation. We are happy to think along with you.<\/p>\n

You can reach us at info@thelegalcompany.nl<\/a> or 020-3450152.<\/em><\/p>\n

Blog by corporate lawyer Celine Sup LL.M.<\/strong><\/em><\/p>\n

______________________________________________________________________<\/p>\n

[1]<\/a> District Court of Amsterdam, 4 August 2026, ECLI:NL:RBAMS:2026:8588<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

A settlement agreement (in Dutch: vaststellingsovereenkomst, or VSO) is often used to end an employment relationship by mutual agreement. During the negotiations on the terms, the termination payment is often a key point. But what if you award a termination payment and it later turns out that the employee deliberately withheld important information? A recent […]<\/p>\n","protected":false},"author":2,"featured_media":31556,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"page_builder":"","iawp_total_views":7,"footnotes":"","_et_pb_custom_css":""},"categories":[201],"tags":[],"class_list":["post-31563","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-employment-law"],"acf":[],"_et_pb_custom_css":"","yoast_head":"\nAll cards on the table? 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