The Netherlands: Non-Compete Clauses must be re-confirmed if Converting a Fixed-term Agreement into an Indefinite Employment Contract

Pay attention: explicitly confirm the non-competition clause in writing (again) when a fixed contract is converted into an indefinite employment contract. Otherwise, it is no longer valid!

Facts

The employee joined the employer for a fixed-term from 2015. The employment contract included a non-competition and non-relationship clause. By letter, the employer converted the fixed-term employment contract into a permanent employment contract, without again agreeing on the non-competition and non-relationship clause. The employer takes the position that the employee has violated the non-competition clause.

Court of Appeals

The employer converted the fixed-term employment contract into an employment contract for an indefinite period without, again, agreeing in writing on the non-competition and non-relationship clause or stipulating that all the agreements previously made (including the non-competition clause) would remain in force.

The fact that the employer verbally pointed out that ‘all other employment conditions remain in force’ is not sufficient in that context. Based on statutory law, it is required to agree upon non-competition clauses in writing.

Further to that, the court ruled that the non-competition and non-relationship clause were not agreed upon in the indefinite employment contract. The Court of Appeals upheld the judgment.

For more information on these articles or any other issues involving labour and employment matters in the Netherlands, please contact Christiaan Oberman (Partner) of Palthe Oberman at oberman@paltheoberman.nl or visit www.paltheoberman.nl.

For more information please contact Joseph Granato, Communications Manager at L&E Global at joseph.granato@leglobal.org.