DENMARK Law and Practice Contributed by: Morten Jensen, Elise Ross-Hansen, Frederik André Bork and Paula Grønlund, Bruun & Hjejle
agreements remain in effect until the expiry of the term of the collective agreement as individual employment terms. With effect as of the expiry date, the individual employment terms may be modified under the general rules for changing employment terms. Restrictive Covenants Restrictive covenants (non-competition and non-solicitation of business restrictions) are per - mitted within a comprehensive employee pro - tective framework, including capped duration and compensation requirements. Non-poaching of employees’ restrictions is only enforceable in connection with share and asset sales during negotiations and for a period of six months following closing. Incentives Salaried employees are generally entitled to a pro-rated cash bonus in a termination scenario without consideration of bad leaver conditions. In connection with certain types of retention bonus, bad leaver conditions on the forfeiture of a bonus may be enforceable. Several categories of share-based incentives permit full or partial forfeiture for leavers. For incentive schemes established prior to 1 Janu - ary 2019, employees generally retain the right to granted unvested options and a pro rata share of future options. In respect of incentive schemes established after 1 January 2019, parties have contractual freedom to regulate the treatment of unvested options upon termination, including forfeiture in the case of employer-initiated dis - missal without fault on the part of the employer. When assessing what set of rules applies, the Danish Supreme Court has stated that the deci -
sive point in time is when the employer made a legally binding commitment to grant the options. In certain circumstances, an obligation on the employee to sell back shares of the incentive scheme at a price below fair market value will be void. This is not an issue in respect of publicly traded shares. 2.6 National Security Review See also 2.3 Restrictions on Foreign Invest- ments . The Investment Screening Act requires that certain transactions be filed with and approved by the Danish Business Authority. If the Danish Business Authority decides that the completion of the transaction should be denied, it must refer the case to the Minister for Industry, Business and Financial Affairs, who is authorised to deny the completion of the transaction if the transaction threatens national security or public order. 3. Recent Legal Developments 3.1 Significant Court Decisions or Legal Developments Court Decisions Litigation in connection with public M&A deals is fairly uncommon in Denmark. Litigation in respect of private M&A deals is also uncommon, although the number of claims against W&I insurers seems to be increasing. As most private M&A deals are subject to arbitration clauses, due (inter alia) to the confidential nature of such disputes, very little public information on such disputes is available. Notwithstanding the foregoing, in November 2023 the Danish Maritime and Commercial High Court ruled in respect of the “Gram Equipment
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