As most people now know, when a claim is made to suspend a non-competition clause, the court weighs up the interests involved. The employer's interests in maintaining the non-competition clause are weighed against the employee's interests in having it declared inoperative/suspended. In the present preliminary relief proceedings, such balancing of interests also took place. Whose interest weighed more heavily according to the Subdistrict Court?
Position with competitor
Employee works as a sales director for the employer and is bound by a one-year non-competition clause. He accepted a position with a direct competitor of employer from 1 October 2023. However, employee claimed suspension of the non-competition clause in summary proceedings.
Balance of interests
The subdistrict court found that a valid non-competition clause had been agreed between the parties. However, employee had a strong interest in being able to join the competitor. He had the ambition to grow into a CEO with the employer, but was not found suitable for that position. At the competitor, the employee was offered the position of CEO, for which he received almost 75% more salary.
The employer has a strong interest in enforcing the non-competition clause to prevent damage to its business. The competitor is a direct and large competitor of employer and employee held a key position within employer and is privy to competitive and business-sensitive information. However, employer acknowledged that technological developments in the industry are very fast. Therefore, employee's knowledge will quickly become obsolete.
Employee was released from work immediately after his termination on 31 August 2023 and disconnected from employer's commercial systems so that he was no longer able to learn about competitively sensitive information. Furthermore, the employee had mainly indirect customer contact and indicated that he would comply with the relationship and confidentiality clause.
The subdistrict court gave more weight to the employee's interests and suspended the non-competition clause from 1 March 2024, i.e. six months after the employee was disconnected from the commercial systems by the employer.
Read the ruling here.
As both an employer and an employee, get proper advice on drafting a sound non-competition clause and also seek legal advice at the time of breach, or, on the contrary, you want to secure suspension of a non-competition clause. The employment law lawyers at SPEE advocaten & mediation will be happy to assist you.