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The government wants to restrict the terms of competition. Such a clause is a contractual prohibition for the employee to do the same type of work in another company after his employment contract has expired.
According to Minister Karen van Gennep, the restriction is often unjustified and makes it difficult for employees to change jobs, which impedes the flow in the labor market. And she wants to amend the law on this point and thus meet the desire of the House of Representatives.
Van Gennip contends that a non-compete clause may be necessary to protect trade secrets or business relationships, for example. “But we now see that such a clause is increasingly standard in contracts, when there is no good reason for it.”
The government wants to oblige the employer to prove the substantial commercial interest of the clause. This concerns, for example, an employee’s confidential contacts with clients, or when an employee knows a certain source code of a computer program. Moreover, the clause must be of limited duration and must be geographically specific. “If you work for a broker in Maastricht, you don’t need the non-compete clause in Groningen,” says Van Gennip.
If the employer forces the departing employee on a non-compete clause, the employer must pay compensation. This consists of a percentage of the last salary earned.
Employment lawyer Hendarin Moseley sees the proposed limitation of the non-compete clause as a positive development. In practice, employees will regularly downplay such an agreement: “In the joy of a new job, the contract is signed without really thinking about the possible consequences of a non-compete clause.”
Mosly also believes that employers will be more aware of the non-compete clause if they have to pay a fee. In the current situation, she says, there is not often a high threshold for a business owner to include a non-compete clause in a contract. By the way, Belgium and Germany also work for a fee.
It is estimated that more than 3 million employees are now bound by the non-compete clause. Van Gennip wants the bill ready by the end of this year, after which citizens and organizations can comment on it. Then he goes to the room.
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