Since the introduction of the Work and Security Act (WWZ), the main rule is that no non-compete clause may be included in a temporary contract. The government believes that there is a ‘double disadvantage’ when an employee with a temporary contract is prevented from working elsewhere after the end of this contract.
But here too, the exception proves the rule. A non-compete clause in a temporary contract is allowed if ‘the clause is necessary due to compelling business or service interests’. This must be evident from the written explanation included with the clause. The chosen wording already shows that the bar is set high. The clause must be necessary and the interests compelling. That is quite something.
Despite these strict requirements, the advice in practice is often to still include a non-compete clause in a temporary contract. The reason? First of all, the ‘deterrent effect’. A non-compete clause, with a penalty for violation, ensures that (former) employees do not simply switch to a competitor.
But in addition, recent case law shows that such a clause holds up in court (the Amsterdam Court of Appeal). This does require a good and extensive explanation of the clause that shows that this article is really necessary and also what interests are involved. It is wise to justify the article in such a way that it aligns with the specific characteristics of the company and the position.
Recent Case Law
The case that the court ruled on concerned a staffing agency for technically trained professionals. The employee was in his second temporary contract, which had been terminated earlier at his request. His employment contract contained a non-compete clause, with the following justification among others:
In the position of consultant, the employee will have access to confidential or non-confidential business data and know-how of the employer, including future business strategy(ies) and plans, pricing, profit margins (…etc). The employer has a compelling interest in preventing the employee from using the aforementioned business data both during and after the end of the employment contract (..). The employer’s business consists of knowledge of contacts and relationships. This knowledge enables it to carry out its activities (..).
It is striking that this justification is not very specific or particular. What is stated in this clause could apply to many companies and positions. However, the judges found that the clause sufficiently substantiates on what business interests this clause is necessary.
According to the court, the clause precisely describes what business-specific information the employee became aware of in his position, and for a company that mediates between potential employers and potential employees, it is of great importance that information about its working methods as well as about those it employs and information about potential clients is protected, according to the court. The former employee ultimately had to pay the staffing agency a penalty of €100,000.
Conclusion
Although the government has set strict requirements for a non-compete clause in a fixed-term contract, it appears in practice that it can still make sense to include such a clause and that it can also hold up in court. Do think of a good justification for this clause and invest some time and energy in this. This significantly increases your chances of success.
