The importance of motivation for a non-compete clause in a fixed-term employment contract

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.

Facts

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.

Ruling

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.

Practical tips

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.

More about Palthe Oberman

All lawyers at our firm specialise in employment law. We have extensive experience in providing employment law advice and resolving employment conflicts.

Meer nieuws