Assistance with Non-competition clauses and employment law

Questioner

The following non-competition/non-relationship clause is included in the employment contract (1-year contract): 'The employee is prohibited, during the employment relationship or within a period of 1 year after termination of the employment relationship, from working in any way whatsoever for a company or organization that is the same, similar or related to that of the employer within a radius of 25 kilometers from the place of business of any branch of the employer or a company affiliated with the employer, whether for payment or free of charge, or from having any share in it of any kind whatsoever, or from establishing, operating, co-operating or having operated in any form whatsoever a business that is the same, similar or related to that of the employer, either directly or indirectly, as well as from having a financial interest in such a business in any form whatsoever, directly or indirectly.' Now the working conditions under the employer are not good (staff turnover of 20 people per year) and they would like to work at another care home that is 22 km away from this care home. (Falls under the same foundation but different Vof) Does this relationship clause hold up?

Lawyer

Why would this be a problem if the new employer is within the same organization?

Questioner

They are independent care homes VOFs that fall under a large foundation. Would it work for another location of that foundation, but other owners (VOF) do not fall under this?

Lawyer

Is it perhaps a franchise? Then it could be a problem, because then they are not subsidiaries, but in my opinion it would have been up to the franchisor to come up with a scam for this (not that that would help you much). But anyway, first ask your employer/the foundation how they look at this.

Questioner

It is indeed a franchise that falls under an umbrella organization. So they are independent entrepreneurs. By the way, I also don't understand how this could harm the current employer, this concerns care for the disabled, the clients provide the employer with money, not the employees.

Lawyer

Case law shows that a non-competition clause must be reasonable. It must contain, among other things: 1. A reasonable period (max. 1 year, or a period no longer than the temporary employment contract itself). 2. A clear description of what is not allowed (no vague, lengthy descriptions) 3. A reasonable geographical restriction (generally e.g. not all of the Netherlands) 4. The penalty clause must be reasonable (in relation to salary). And the following also applies: If the non-competition clause unreasonably restricts an employee from performing his work or makes him completely unable to work in that sector for a long period of time, the court can be requested to annul/moderate the clause. The clause can be annulled in whole or in part (in the case of partial annulment, the region can be reduced, the term shortened, etc.). The court can also determine that the employer must pay the employee compensation for the period that he cannot perform his work or is severely hampered in his work. The judge looks very carefully at the employee's interest: The employee's interest concerns the interest of free choice of work, opportunities for position improvement and development opportunities, prevention of unemployment, etc. The employer's interest concerns the prevention of significant damage due to (unlawful) activities of the former employee. This does not concern the employer's interest in keeping certain employees in service. If the clause is used as a threshold for employees to leave, there is a good chance that the judge will largely remove this threshold by limiting the effect of the clause. I do see possibilities for you if you cannot reach an agreement with your employer. Labor law is my specialty and I often succeed in convincing your employer to find a solution without a procedure. Feel free to contact me without obligation.

Questioner

Should the penalty clause also be included? Because that is not stated anywhere in the contract. In addition, they seem to want to restrict all healthcare institutions, while making work impossible in this sector?

Lawyer

No, a penalty clause is not mandatory. An employer can also demand compliance with the non-competition clause on pain of being liable for a penalty.