Many employment contracts contain a non-compete clause or a non-solicitation clause. These provisions limit your ability to work for a new employer or maintain contacts after your dismissal or departure. For employees, this can have far-reaching consequences, especially when they want to take a new step in their career.
A non-compete clause is an agreement in the employment contract that stipulates that after the end of your employment you may not work for a competitor. A non-solicitation clause goes a step further: it prohibits you, after your departure, from approaching or collaborating with the business relations of your (former) employer — such as customers or partners.Is there a dispute about the non-compete or non-solicitation clause, for example because you believe the restriction goes too far or the agreement is unclear? In that case, you can go to court to have the matter assessed.
In this article, we explain what a non-compete clause and a non-solicitation clause are, when they are valid, and how you can defend yourself against them.
What is a non-compete clause?
A non-compete clause prohibits an employee from working for a competitor or starting a competing business after termination of the employment contract.
This clause can take various forms and often includes restrictions on:
- The type of work: for example, not performing the same work for a new employer.
- The new employer: for example, not entering into employment with a direct competitor.
- The geographic area: for example, not working within a certain region.
- The period: for example, for one or two years after leaving employment, not performing competing work or starting your own business.
Such a clause is common in sectors where knowledge, clients, or business-sensitive information play a major role.
Important:
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It must in writing have been agreed.
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It may only be included in a permanent contract be included.
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In a temporary contract it is only permitted with a compelling justification.
What is a non-compete clause?
A non-compete clause means that after the end of their employment, an employee may not simply work for a competing company, or start a competing business of their own. In practice this is often called a “non-competition clause” or “non-compete clause”—the terms mean the same thing.In short: with such a clause, an employer wants to prevent trade secrets, customer relationships, or specialized knowledge from immediately ending up with a competitor.
Does a non-compete clause also apply to freelancers or contractors?
Yes, a non-compete clause can also be agreed with freelancers or contractors. In those cases, different rules may apply than for employees. It is important to make clear agreements, because freelance and services contracts do not automatically fall under employment law. So pay close attention to the content and the conditions of the clause.
What is a non-solicitation clause?
A non-solicitation clause prohibits an employee from doing business, after the employment relationship, with customers, suppliers, or other business relations of the (former) employer.
This clause is common in commercial roles, but it can be used in any sector.
Only a non-solicitation clause, no non-compete: what does that mean?
When only a valid non-solicitation clause is included, but no (valid) non-compete clause, that has specific consequences for your options after you leave employment.
- In that case, you may indeed start working for a competitor or start your own business in the same field.
- What is not allowed: doing business with (former) clients, suppliers, or other business relations of your former employer, as long as the non-solicitation clause applies.
- In other words: you are free to work in the industry, as long as you do not maintain contact with or collaborate with the business relations of your former employer.
This can create room for new opportunities, provided you respect the limits of the non-solicitation clause.
When is a non-compete or non-solicitation clause valid?
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The clause must be in writing in the employment contract.
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For fixed-term contracts, the employer must justify it why it is necessary.
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The restriction must not be unreasonable; a court can annul or limit the clause if it goes too far.
How can you defend yourself against a non-compete or non-solicitation clause?
Negotiating when entering into the contract or upon departure.
Before you resort to legal action, it is often worthwhile first to see whether you can solve the problem together. This can be done, for example, by negotiating directly with the other party. Sometimes you can work it out together and a lawsuit is not necessary at all, or it can be concluded more quickly.
Mediation: reaching a solution together
Is it not possible to work it out together? Then you can choose mediation. An independent mediator guides the conversation between you and the other party, with the aim of reaching a solution together. Mediation is often less formal, faster, and can even be used when a lawsuit is already underway.
Arbitrator: help from an independent third party
If a dispute still remains, you can sometimes turn to an independent third party who will look for a solution together with both parties. Only if that does not work will this person make a binding decision. Such a procedure can help to reach an outcome in a practical way without immediately going through the full court process.Going to court
: the judge can wholly or partially annul the clause.
Who can go to court?
If you and your (former) employer cannot resolve your non-compete or non-solicitation clause, you can both submit the dispute to the court. Both the employee and the employer have the right to start proceedings if they disagree about the application or legality of the clause.
Claim damages if the clause disproportionately disadvantages you.
What is mediation and how does it help with disputes about a non-compete clause?
Mediation is an alternative way to resolve conflicts without going straight to court. An independent and impartial mediator guides the conversation between you and the other party. Together you look for a solution that both sides can agree on.
- Mediation is confidential and often faster and more informal than a court case.
- You keep more control over the outcome than with a court decision.
- Even if legal proceedings are already underway, you can still try mediation.
Mediation can be especially useful in disputes about a non-compete clause, because it allows for tailored solutions that both parties can move forward with.
Examples from practice
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Example 1: An employee with a temporary contract was given a non-compete clause. The court annulled it because there was no strong justification.
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Example 2: An account manager was not allowed to contact his former clients because of a non-solicitation clause. The court limited the clause to only 6 months.
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Example 3:An employee was granted permission to work for a competitor but negotiated compensation from his employer.
Checklist non-compete and non-solicitation clauses
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📄 Is the clause stated clearly and in writing in your contract?
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⏳ Does the clause apply in a fixed-term contract without justification? Then it is invalid.
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🧑⚖️ Is the clause too broad (e.g., too long a duration or too large a territory)? Then a judge can limit it.
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💶 Ask for compensation if the clause hinders you in getting a new job.
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⚖️ Always have your contract legally reviewed.
Common mistakes
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Thinking that a non-compete clause is always legally valid.
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Not objecting to an overly strict non-solicitation clause.
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Agreeing too quickly without negotiating.
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Not realizing that a judge can limit or invalidate the clause.
Frequently Asked Questions (FAQ)
1. Is a non-compete clause allowed in a fixed-term contract?
Only with a compelling written justification from the employer.
2. How long can a non-compete clause last?
Usually 1 to 2 years; longer periods are often unreasonable.
3. Can I challenge a non-compete clause?
Yes, a judge can invalidate it in whole or in part.
4. What is the difference between a non-compete clause and a non-solicitation clause?
A non-compete is about working for a competitor; a non-solicitation clause concerns doing business with customers/contacts of your former employer.
5. Do I receive compensation if I am bound by a non-compete clause?
That is possible, especially if the clause seriously restricts you.
6. What are the consequences if a judge rules that the employer acted in a seriously culpable manner in the dismissal?
In that case, the non-compete clause usually lapses entirely. You may then start working for a competitor immediately, because the judge finds that you no longer need to be bound by the clause due to the employer’s conduct.
Why Arslan Advocaten?
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Specialized in employment law and contractual clauses
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Experience with voiding or limiting from overly strict non-compete and non-solicitation clauses
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Negotiating over restrictions or compensation
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Protect your career and career opportunities
Conclusion
A non-compete clause or non-solicitation clause can severely restrict your freedom in the job market. Fortunately, there are legal limits, and you can often negotiate or have the clause annulled. Always have your contract reviewed before you sign or move to a new employer.
