'Improvement In Position' Cuts Both Ways In Non-Compete Clauses

When it comes to enforceability of a non-compete clause, the prospect of a raise for the employee can in some instances be an argument in favour of the employer.

Non-compete clauses in indefinite-term employment contracts are generally enforceable under Dutch law if the clause was validly agreed and has not lost its effect over time as a result of major changes in the employment relationship. However, a valid non-compete clause can be annulled (or suspended) in whole or in part under certain conditions.

Challenging enforceability of a non-compete clause

A court may annul, modify or suspend a non-compete clause if the employee is unfairly disadvantaged in relation to the interests of the employer that the clause seeks to protect. If the disadvantage to the employee outweighs the employer's interest, the duration or geographical scope of the clause may be limited.