A recent ruling by the District Court of Central Netherlands illustrates the importance of providing a proper motivation for the inclusion of a non-compete clause in a fixed-term employment contract. This blog briefly discusses the ruling and provides practical tips for employers.
The employee joined the employer on December 1, 2021, based on a fixed-term employment contract. The employment contract contained a confidentiality, non-compete, and penalty clause. At some point, the employee resigns and subsequently starts working for a new employer. The employer claims that the employee is bound by the non-compete clause and requests the judge to prohibit the employee from working for the new employer, subject to a penalty.
The non-compete clause in the employment contract is not motivated, which means that the clause is void and the employee is not bound by the non-compete clause. Furthermore, the former employer has failed to specify or support the nature of the employee’s alleged wrongful conduct.
Keep in mind that a non-compete clause without motivation in a fixed-term contract is void in principle. The motivation must clearly explain why the non-compete clause is necessary to protect the employer’s business interests. The legal requirements for the motivation are not defined by law. Case law shows that a “standard” motivation is not sufficient. For more information about the motivation, please refer to this blog.