This week, we\u2019re reporting on a court ruling in which an employee\u2014who, for years and without his employer\u2019s knowledge, had been diverting one of the employer\u2019s clients to his own business\u2014not only lost his job but was also ordered to pay nearly \u20ac200,000 in damages. On August 5, 2026, the North Holland District Court ruled that a violation of a side-job clause can result in substantial damages, even after the employee has already been summarily dismissed.<\/p>\n
What were the facts of this case?<\/strong><\/p>\n A company that designs and builds booths and projects for trade shows and business events had employed a project manager since December 2012. His employment contract contained a non-compete clause and a clause prohibiting secondary employment. Under these clauses, he was not permitted to work for another party or conduct business on his own account during his employment. As a project manager, he managed the relationship with an American client that performed work similar to that of the employer itself. As early as January 2019, the employee contacted his contact at that client via his personal email address with a proposal for direct collaboration outside the employer\u2019s scope, with the express wish to keep this \u201cunder the radar.\u201d Between 2019 and 2022, there was extensive WhatsApp communication regarding further collaboration, including discussions about the legal risks involved.<\/p>\n In March 2025, the employer was tipped off that the employee had set up a trade show booth during work hours for a client with whom there was no active contract, and had asked a colleague not to disclose this. An IT vendor brought in to investigate found messages, quotes, cost estimates, and designs on the employee\u2019s laptop for projects involving the American client that had not been outsourced to the employer. On March 28, 2025, the employee acknowledged that he had walked \u201ca fine line\u201d and was summarily dismissed that same day. The confirmation letter revealed that on March 11, 2024, he had established his own business from which he had, in part during working hours, issued quotes and invoiced the employer\u2019s clients. The employer offset part of the damages against the final settlement. On August 4, 2025, the Utrecht subdistrict court ruled in a separate, now final proceeding that the summary dismissal had been lawfully issued.<\/p>\n In the present (and thus separate) proceedings, the employer sought damages in the amount of \u20ac227,942.13, consisting of lost profits, misused discount points, the statutory fixed damages, and costs incurred in determining the damages. The employee raised a defense: he considered himself sufficiently \u201cpunished\u201d by the termination, disputed the damages and the causal link, and contested the amount of the claims.<\/p>\n The findings and ruling of the subdistrict court<\/strong><\/p>\n The subdistrict court found that the employee acknowledged having engaged in competing side activities for personal gain during his employment. In doing so, he violated the non-compete clause and acted in breach of the duty of good faith as an employee. This constitutes an attributable breach. The employee\u2019s defense\u2014that the clause was no longer \u201ctop of mind\u201d for him and that the law changed in 2022\u2014fails. The clause remains valid, and the employee\u2019s actions would have been unlawful even without that clause. The fact that he had already been summarily dismissed for the same conduct does not mean that the employer cannot separately recover the damages suffered.<\/p>\n The main point of contention concerned the causal link to the alleged lost profits. The employee argued that the American client had already decided in 2019, independently and out of dissatisfaction, to terminate its relationship with the employer, and that the employee had only taken on a few projects starting in 2023 at the client\u2019s request\u2014projects that would not have been awarded to the employer otherwise.<\/p>\n The subdistrict court judge did not agree with this argument. The correspondence shows that the employee himself had already taken the initiative for a direct collaboration as early as January 2019, that this topic recurred constantly in the years that followed, and that this led in 2023 to direct projects carried out on his own account. The documents regarding the alleged termination in 2019 are dated after his own proposal, while WhatsApp messages show that both parties were already aware of the legal risks at that time. It is more plausible that the client\u2019s decision was motivated by that intention rather than by dissatisfaction. This is confirmed by the fact that the client still placed an order in 2022. As an account manager, it would have been the employee\u2019s responsibility to address any dissatisfaction, and there is no evidence that he did so. Statements made by his contact person after the fact were deemed to have no probative value, given the contact person\u2019s interest in the matter.<\/p>\n To calculate the amount of lost profits, the employer applied a margin of approximately 40%, based on his own average margin on previous projects\u2014a percentage that the employee himself also used. Of the seventeen projects, he acknowledged three. For the remaining projects, he raised an unsubstantiated defense, even though he\u2014with full access to his own records\u2014should have refuted this with substantiated arguments. He failed to do so, in part because specific quotes and designs for the disputed projects were found on his laptop. However, the subdistrict court agreed with him that the margin applied referred to gross profit. For that reason, 10% was deducted, and the lost profits were estimated at \u20ac188,000, instead of the claimed \u20ac208,971.01.<\/p>\n The claim regarding the misuse of Expedia discount points was also granted. The employee had undisputedly used company points for bookings related to his own side businesses, thereby unjustly enriching himself at the employer\u2019s expense. His defense that this was common practice was rejected. The employer had successfully refuted this with statements from three employees. The fixed compensation was also awarded, with no room for the mitigation sought by the employee, because Article 7:677(5) of the Dutch Civil Code does not permit mitigation to an amount less than the wages for the statutory notice period, and that amount was exactly what was claimed.<\/p>\n Finally, the subdistrict court assessed the costs incurred in determining the damages (Article 6:96(2)(b) of the Dutch Civil Code). The costs of the IT vendor (\u20ac544.50) were awarded, as this investigation was also necessary for these proceedings. The claimed internal hours (nearly 134 hours) were only partially awarded. A portion had been spent on the termination meeting, the financial settlement, and reviewing litigation correspondence. According to the subdistrict court judge, those costs do not fall under Article 6:96 of the Dutch Civil Code. Furthermore, the hourly rates were not sufficiently substantiated. The internal hours item was reasonably estimated at \u20ac8,000. On balance, the subdistrict court judge estimated the total damages at \u20ac205,224.32. Since the employer had already deducted \u20ac6,365.21 from the employee\u2019s final pay, the employer was ordered to pay the remaining amount of \u20ac198,859.11, plus statutory interest, as well as attachment and litigation costs.<\/p>\n