Non-competition clause in fixed-term contract, is that allowed?

Employee has been employed on a fixed-term contract in the position of sales manager.

The employment contract was renewed on 20 July 2021 until 15 October 2022. The employment contract contains a non-competition clause in Article 7, but is that clause valid, as it was a fixed-term contract?

The employee gave notice of termination of her employment contract with the employer on 1 April 2022 and claimed the suspension of the non-compete clause before the Subdistrict Court.

The starting point is that a non-compete clause in a fixed-term employment contract is not legally valid, because an employee would then suffer 'double disadvantage'.

This main rule only suffers from an exception if the written motivation for the clause shows that it is necessary because of important business or service interests.

The important business or service interests must be clearly defined, so that it is clear to the employee why these interests force the employer to make an exception to the main rule.

Een enkele algemene omschrijving van het belang van de werkgever is dus onvoldoende.
De kantonrechter is van oordeel dat dit niet volgt uit het overeengekomen non-concurrentiebeding.

The employer has given an extensive but general enumeration of interests as written motivation, which may also apply to many other commercial companies. In addition, the non-competition clause has not been tailor-made either.

On the basis of the above, the Subdistrict Court is provisionally of the opinion that the employer has not complied with the increased obligation to state reasons that applies to a non-compete clause in a fixed-term employment contract.

You can read the ruling here.

Would you like to know more about this judgment or about non-competition clauses? The employment law team of SPEE advocaten & mediation is ready to assist you.

SPEE advocaten & mediation Maastricht