Employment Agreement Covenants in the Netherlands

Types, enforcement, and compensation.

Updated on December 20th, 2022

What types of covenants can be recognized in the Netherlands?

Covenants can be included as a clause in the employment agreement. Please note that business reasons need to be specified when noncompetition and nonsolicitation clauses are included in a fixed-term contract.

The following types of covenants are recognized in the Netherlands, including but not limited to noncompete, business relations clauses, intellectual property (IP), nonsolicitation, and secrecy clauses.

Can these covenants be enforced? How are they enforced? 

Covenants can be enforced in the Netherlands through the penalty clause or through court. The courts will decide if the restrictive covenant was valid from the outset prior to deciding if any breach occurred. The overall time the restrictive covenant will be active must be “reasonable,” with one year being a general benchmark for reasonability.

Does my supported employee need to be compensated in return for restrictive covenants? 

If your supported employee is restricted from working for another employer due to the noncompete clause, they may be entitled to compensation for the term of the restriction.