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Non-compete clause and the necessity of a written agreement

2009 May 13
by Babise de Laive

Court: Netherlands Supreme Court

Date: March 28th, 2008

LJN number: BC0384

Case: Under Article 7:653 of the Dutch Civil Code an employer and an employee may enter into a non-competition clause, whereby the latter is restricted in his right to work in a given way after the end of the contract. Such a clause is valid only if the employer has so agreed in writing with an adult employee. In the case at hand the employer had sent a letter containing new standard conditions of employment to the employee, with the request to accept the new conditions by means of signing and returning the letter (and not the new regulations). As in the previous version, the new regulations contained a non-competition clause. The employee wrote: "These are accepted by me", signed and returned the letter. Years later he decided to leave the company and started working for a competitor, after which proceedings were initiated. It was argued that Article 7:653 of the Dutch Civil Code serves to protect the employee against thoughtless acceptance and that therefore necessity of a written agreement should be construed as such that it is required that the employee signs a document that must specifically deal with non-competition. A general referral to a certain document does not suffice, in this interpretation of the law.

Held: The employer has an obligation to make the written non-competition clause avavailable to the employee and it is a formal requirement that the employee accepts to be bound in writing, but it is not necessary that his written acceptance is placed on the document that contains the clause itself. The Netherlands Supreme Court further clarifies that a general acceptance of a document is sufficient and that it is not necessary that the employee specifically refers to the non-competition clause in his acceptance, unless the document did not accompany the invitation letter, in which case a specific acceptance is required. Follows a dismissal of the appeal of the employee.

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