Non-Compete Clause Invalid: Employee Interests Prevail
Non-compete agreed, but still unenforceable?
In Dutch employment law, the non-compete clause is a powerful tool for employers to protect their business interests. Yet even a legally valid clause is not automatically enforceable. This was confirmed in a recent decision by the Arnhem-Leeuwarden Court of Appeal on 31 October 2023.
The court ruled that the non-compete clause of a mechanic at Smeba Fire Protection could not be upheld, despite being correctly agreed upon. Why? Because the employee’s personal interest outweighed that of the employer.
The case: from Smeba to a competitor
The employee had worked for over ten years as a mechanic at Smeba Fire Protection. His employment contract included a non-compete clause prohibiting him from working for a competitor for two years after leaving the company. After resigning, he took a position at B.R.N., a smaller fire protection company.
Smeba claimed a violation of both the non-compete and confidentiality clauses, demanding heavy penalties: €58,500 in fines plus €500 per day for each day of breach. The company also requested access to the employee’s new employment contract.
The court’s view: no commercial harm, but personal improvement
The court found that the employee held a mainly operational role with no commercial responsibilities. His contact with clients was expected in his position and did not equate to access to sensitive commercial knowledge or influence. Even temporary assistance on the sales team did not prove exposure to confidential competitive information.
Moreover, Smeba provided no concrete evidence of customers switching to the competitor or of any real damage to its business. The court also noted that the employer seemed more focused on financial compensation than on actual protection of business interests—especially since Smeba had previously offered to buy out the non-compete clause.
In contrast, the employee convincingly demonstrated that the job switch improved his work-life balance: a shorter commute, a four-day workweek, better availability for the volunteer fire brigade, and a higher salary.
Balancing interests: court sides with employee
Under Article 7:653(3) of the Dutch Civil Code, a judge can nullify a non-compete clause if it unreasonably disadvantages the employee compared to the employer’s interest. That is exactly what the court did here:
“The non-compete clause limited the employee’s right to choose where to work, without Smeba demonstrating a sufficiently compelling interest to justify this.”
The confidentiality claim also failed. There was no evidence that confidential information had been shared or misused.
What does this mean for employers?
This ruling is a clear reminder that a non-compete clause is not a goal in itself. Employers should ask themselves:
Is there truly sensitive knowledge or customer information at stake?
Is the clause proportionate, or does it unnecessarily limit the employee’s professional freedom?
Is there concrete evidence of damage or risk to the business?
Pre-litigation behaviour, such as offering a buyout, can also negatively impact the court’s assessment of the employer’s actual interest.
Conclusion
A non-compete clause should not be used as a standard tool to restrict employees. It must serve to protect legitimate business interests. This ruling shows that courts assess the substance of the clause, the employee’s role, and its proportionality with a critical eye.
Employers are well advised to clearly justify each non-compete clause, enforce it with care, and apply it only when truly necessary.
This blog was written by Mr. Stijn Blom
Employment law attorney at expatlawyer.nl B.V. Stijn has extensive experience in employment law and supports entrepreneurs on a daily basis with a wide range of employment law issues. From dismissal cases to drafting watertight agreements and regulations – with his practical and personal approach, he helps employers and employees move forward. Want to know more? Visit Stijn’s page.
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June 2025
