In the first quarter of 2023, the Rotterdam subdistrict court dealt with the interpretation of a non-compete clause, which included that the employee was prohibited from joining a competitor of the employer in question, within the Netherlands, within 12 months of the end of the employment. After termination of the employment contract, the employee joined a competing employer in Belgium. The former employer considers this to be a breach of the agreed non-compete clause. What is the view of the subdistrict court?
The employer argues that the text of the non-compete clause shows that the employer wants to protect the market position in the Netherlands. According to the employer, that market position is also at stake if the employee joined a Belgian competitor. Moreover, the employer takes the position that the employee works partly from home (in the Netherlands) for his new Belgian employer.
To determine whether the employee is allowed to join the new employer in Belgium, the subdistrict court must determine the exact scope of the non-compete clause. In that context, the subdistrict court applies the so-called Haviltex standard to interpret the clause. This means that the question of what the parties agreed on is not only about the linguistic wording of the non-competeclause, but also about the meaning that may be attributed to it in the sense of what the parties were entitled to expect from each other from each other's statements and conduct.
It is established between the parties that the non-compete clause was not negotiated. The clause was drafted unilaterally by the employer and accepted by the employee. Furthermore, it does not appear that the content and scope of the non-compete clause were discussed when the employment contract was concluded. Therefore no clues can be found in the phase preceding the employment contract that could influence the interpretation of the non-compete clause. Therefore, the literal text of the non-compete clause, is decisive in this case.
Opinion of the subdistrict court
In the subdistrict court's opinion, the literal text of the non-compete clause implies that the employee is not allowed to join a competitor of the former employer in the Netherlands. After all, the non-compete clause expressly speaks of "entering the service of" in the Netherlands. The fact that the employee also performs work from home (in the Netherlands) makes no difference, according to the subdistrict court. The wording of the non-compete clause does not show that the employer intended to prohibit the employee from entering the service of a competitor, regardless of where the competitor is based. The subdistrict court concluded that the non-compete clause had not been breached by the employee.
You can read the judgment here
For an employer, there can be strong interests in preventing a former employee from joining a competitor. The judgment of the Rotterdam subdistrict court, as discussed in this article, shows that the wording of a non-compete clause is of great significance if there is a disagreement between the employer and employee on the interpretation of this clause. This is especially true if the clause is not the result of negotiations, but was drafted unilaterally by the employer. Therefore, we advise employers to clearly lay down in the non-compete clause what the employee is and is not allowed to do after the end of the employment contract. It is also important for employees to clarify this before signing a non-compete agreement. It should be noted that in many cases, hybrid working (partly from home) is popular nowadays, which - as this article also shows - can cause discussions when interpreting and applying a non-compete clause. We recommend to take this into account when drafting and recording in writing a non-compete clause.
Do you have any questions or would you like advice or assistance in drafting and/or assessing a non-compete clause? The employment lawyers at SPEE advocaten & mediation will be happy to assist you!