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What is a non-competition clause ("concurrentiebeding")?

Non-competition clause


An employment contract may contain a non-competition clause. What is a non-competion clause or "concurrentiebeding"?

Restriction to work in a comparable job or for competitors


After termination of the employment contract the employee may be restricted in accepting comparable jobs or employment in enterprises within a  certain distance from the previous place of work. This is the so-called ‘non-competition clause’. The clause can only be agreed upon in writing and with a person of 18 years or older. A non-competition clause is usually effective for a period of one year after the termination of the employment agreement but also a different period can be agreed. Parties may agree that a penalty must be paid in case of non-compliance.
 
A non-competition clause must be carefully phrased. If the employee should request so, the court of justice may limit the scope of the clause or set the clause aside if it is of the opinion that the employee is disproportionately restricted in his re-employment. The court may also mitigate (possible) penalties for non-compliance by the employee. In addition, the court may fix a compensation payable to the employee if the former employer wishes to enforce the clause.
 
 
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Comments (5)
Comment by Evgueni on Tue, Mar 1st, 2016 at 6:04 PM
Hi, I am working in the Netherlands in 2016 and am receiving a non competion indemnity from France from my previous employer. How should I declare it on my tax return for 2016? I will already be paying tax on it in France. Kind regards
Comment by Helen on Mon, Apr 10th, 2017 at 9:04 AM
My contract has such a clause, however does that mean that I cannot work at another company?
Comment by Arjan Enneman on Tue, Apr 11th, 2017 at 2:40 PM
That depends on the actual text of the clause. You can always work for another company but the non-competition clause may prevent you from working for certain competitors for a certain period of time after the end of your current contract. Relevant here is also how the contract ends, will it be on your initiative or your employers‘ initiative. If your employer ends the contract you may have a bigger chance to work for a competitor depending on why the contract was ended. It differs per personal situation and a judge can limit a non-competition clause as well.
Comment by Anders Bock on Fri, Sep 21st, 2018 at 8:43 PM
I have received an offer for a job position in Holland. In the contract there is a Non-competition clause, for 6 month after the termination of contract. I think its fair in my case, that there is this clause. In my contract, no compensation is mentioned! But in other EU countries, you receive a financial compensation in the month, where you are not allowed to do compete. What is normal in Holland and what do you mean by the last line you write.: In addition, the court may fix a compensation payable to the employee if the former employer wishes to enforce the clause. Do the employer have to pay compensation to the employee, if the employer wishes to enforce the clause? Thanks !
Comment by Arjan Enneman on Thu, Sep 27th, 2018 at 12:56 PM
The clause is part of the employment contract as and if agreed between employer and employee. There is no legal obligation to include the clause nor is prescribed how the clause must be created, nor will an employer have to pay a certain amount to the employee if the clause comes in effect. The Court can check, upon request of the employee, whether the clause is fair and reasonable. That will be the decision of the individual judge. The outcome in different situations will therefore often be different. Legal assitance may be required.
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