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The Danish Marketing Practices Act offers limited protection

February 2010 - Employment. Legal Developments by Norrbom Vinding Law Firm, member of ius laboris.

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Employers should be aware that the Danish Marketing Practices Act only offers limited protection against former employees’ competitive behaviour.

Employers should note that the best precaution against competition from former employees is a non-competition and/or a non-solicitation clause. In the case at hand, an employer came to realise that relying on the protection of the Danish Marketing Practices Act was not sufficient.   The case concerned two employees who resigned and started working for a competing business. The former employer had previously waived the employees' non-competition and non-solicitation of customers clauses. The employer believed that in taking up employment with the competitor, the two employees breached the Danish Marketing Practices Act by exploiting the knowledge about procedures, clients and contract forms which they had built in the course of their employment.  

No clauses
The Danish Maritime and Commercial Court ruled in favour of the two employees. The Court held that although the former employer's contract forms had in fact been copied, those forms could not in themselves be considered trade secrets since they were intended for persons outside the firm and therefore could not be considered secret. Accordingly, the employees had not breached the Danish Marketing Practices Act.   Further, the Court noted that by waiving the non-competition and non-solicitation of customers clauses, the former employer had precluded itself from preventing its former employees exploiting the knowledge they had obtained in the course of their employment. Finally, the Court noted that s 1 of the Danish Marketing Practices Act only covers businesses and not employees.  

Norrbom Vinding notes:

  • that the case emphasises the importance of the additional protection offered by non-competition and non-solicitation clauses compared with the Danish Marketing Practices Act; and

  • that the ruling suggests that s 1 of the Danish Marketing Practices Act does not apply to actions taken by employees.

This information does not constitute legal advice and should not be relied upon as such

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