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    Changes to be made to the non-compete clause?

    Research has found that one out of every three employers uses a non-compete clause to avoid scarcely available staff from leaving the organization, even though such a clause is not meant to be used for that purpose.

    Freedom

    According to various experts and politicians, a non-compete clause no longer suits the contemporary labor market. In its current form, a non-compete clause hampers employees too much in their freedom of movement on the labor market and employers only use it as a means to keep employees working for their organization (instead of using it to prevent employees from working in unfair competition to their organization). Minister Koolmees of the Ministry of Social Affairs and Employment therefore commissioned research center Panteia to conducted research into the use of non-compete clauses. The result are shocking. 35% of employers uses the clause for other purposes than what it is designed for and many employers also refrain from customizing non-compete clauses to suit the respective circumstances – even though such customization is highly recommended. Furthermore, a non-compete clause is often also included in contracts of employees working in a job position where such a clause is not necessary. Employers state they see no alternative option to protect their company data and business relations. In response to these findings, minister Koolmees has drawn up instructions for the new cabinet to implement new policies and tighten current rules. Examples of such policies include providing financial compensation to employees subject to a non-compete clause and/or setting a maximum duration for non-compete clauses.

    Non-compete clause

    Research center Panteia found the following results:

    • 35% of employers includes a non-compete clause in employees’ contracts;
    • 23% of small-scale enterprises uses non-compete clauses;
    • 45% of large-scale enterprises uses non-compete clauses;
    • 37% of the total workforce is subject to a non-compete clause;
    • 90% of employers who use non-compete clauses do not customize these clauses;
    • 35% of employers use a non-compete clause to avoid scarcely available staff from leaving their organization.
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