The Supreme Court issued another interesting ruling last week (click here for the full judgment). The subject of the dispute was the question of whether a non-solicitation clause also falls under the statutory rules for a non-compete clause and whether the employer could demonstrate that this clause was validly agreed upon.
An employee had been employed by an accounting firm. The employment contract included a non-competition clause. The 2002 employee handbook was also incorporated into this employment contract. The employee handbook contained a relationship clause.
According to the employer, the employee had violated the relationship clause and forfeited a penalty due to breach of a valid non-competition clause agreed upon with him as referred to in Article 7:653 of the Dutch Civil Code. The employee argued that there was a difference between the non-competition clause in his employment contract and the relationship clause in the 2002 staff regulations. He took the position that he had not violated the non-competition clause and that the relationship clause was not validly agreed upon with him in writing, arguing that the staff regulations containing this clause were not handed to him upon signing the employment contract.
According to the Supreme Court, Article 7:653 paragraph 1 of the Civil Code concerns ‘a provision between the employer and the employee whereby the latter is restricted in his authority to work in a certain way after the termination of the agreement.’ The Supreme Court then rules that this provision also applies to a non-competition clause as in the present case.
According to the Supreme Court, the written requirement of Article 7:653 paragraph 1 of the Dutch Civil Code can also be met if the non-compete clause is included in terms of employment recorded in a different document than the one signed by the employee. In that case, one of the following two requirements must be met: (a) the terms of employment were attached as an appendix to the signed document and that document referred to those terms of employment, or (b) the employee explicitly declared in the signed document that he agrees to the non-compete clause.
