NETHERLANDS Law and Practice Contributed by: Inge de Laat, Tijmen Noordoven, Ilaha Muhseni and Laetitia Wezenbeek, Rutgers & Posch
for violations, which must be written, capped relative to salary, and narrowly defined. Confidentiality clauses cannot be used to block lawful whistle-blowing. Employees are not permitted to make unfair public accusations against their (former) employer. Should an employee’s comments cause damage, the employer can claim compensation. Employee Liability Generally, employees are not liable for damages caused while performing their duties, unless the harm was caused intentionally or through deliberate reck - lessness. Furthermore, according to the Dutch Civil Code, employers are responsible for their employees’ actions within the scope of employment; this means that employers generally bear liability for damages caused by their employees during work. Non-compete clauses are only valid if agreed upon; they must be in writing and specify the restricted activities, geographic area and duration. The employ - ee must be at least 18 years old when signing the agreement. The restrictions should be limited to what is reason - ably necessary to protect the employer’s legitimate business interests. Typically, a duration of one year is considered appropriate. The scope of the restrictions depends on the industry and the employee’s role. Non-compete clauses cannot be used to indefinitely bind employees to the company. Non-compete clauses are generally prohibited in fixed-term employment agreements unless the employer can justify a significant business interest for including such a clause, which must be explic - itly stated in the contract. This significant business interest must exist both at the moment of signing the agreement and the moment the employer enforces the non-compete clause. 2. Restrictive Covenants 2.1 Non-Competes
Employers may enforce non-compete clauses in court and claim damages if breached. Usually, a penalty clause is included, requiring the employee to pay a predetermined amount if they violate the agreement. Employers may also take legal action against a new employer who knowingly hires someone breaching a non-compete clause. Courts can reduce or refuse to enforce non-compete clauses. The clause may become partially or fully inva - lid if the employee’s job duties change significantly and unforeseeably at the moment of signing the non- compete. If the clause restricts the employee’s ability to work elsewhere, courts may order the employer to compensate the employee during that period. Employ - ers can also choose to release the employee from the clause, ending their obligation to pay compensation. However, this is uncommon in the Netherlands. A bill introduced on 4 March 2024 by the government seeks to tighten rules around non-compete clauses. If passed, it will limit the maximum duration to one year, require a clear and justified geographic scope, and oblige employers to prove a “compelling business interest” for the clause, even in permanent contracts. Employers would also be required to pay compen - sation equal to 50% of the employee’s last monthly salary for each month during which the employer enforces the restriction against the employee after the termination date of the employment agreement. These rules would also cover non-solicitation clauses. The bill has not yet been considered by the House of Representatives. It is therefore unclear if the bill will be passed and, if so, when the bill will enter into force. 2.2 Non-Solicits Employment agreements can include a non-solic - itation clause, which prevents the employee from approaching the employer’s clients or colleagues both during and after their employment. A non-solicitation clause has the same requirements as a non-compete, meaning the employee must be at least 18 years old when signing the non-solicitation clause and, where an employment agreement is for a definite period of time, the non-solicitation clause must include a significant business interest for includ -
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