A recent ruling of the Court of Rotterdam dealt with the interpretation of a non-competition clause. The non-competition clause prohibited the employee from taking up employment with a competitor of the employer in the Netherlands within twelve months after the end of the employment. When the employee, after leaving, joined a competitor of the employer in Antwerp, the former employer still regarded this as a breach of the non-competition clause. The employer held that its wish to protect its market position in the Netherlands was apparent from the text of the clause, and that the same protection was at stake when the employee joined the Belgian competitor. Besides, the employer considered it important that the employee also works from home (in the Netherlands) for this Belgian employer.
‘Haviltex’ standard
To answer the question whether the employee was allowed to join the new employer in Antwerp, the Subdistrict Court had to determine the exact scope of the non-competition clause. To interpret the clause, the Subdistrict Court applied the ‘Haviltex standard’. According to this standard, the significance of what the parties have agreed on lies not only in the linguistic wording of the text of the non-competition clause, but also in the meaning the parties could reasonably ascribe to each other's acts and representations and what they could reasonably expect from each other. The social position and knowledge of the law of the parties and the creation of the non-competition clause are relevant to determine what exactly the parties could expect from each other.
It is an established fact between the parties that the non-competition clause was not negotiated. The clause was drafted unilaterally by the employer. Besides, there is no evidence that the contents and purport of the non-competition clause were discussed when the employment agreement was concluded. This entails that in the phase preceding the employment agreement, no clues can be found that may affect the interpretation of the non-competition clause. Therefore, the wording of the clause has great significance.
Opinion of the Subdistrict Court
In the opinion of the Subdistrict Court, the wording of the non-competition clause entails that the employee is not allowed to take up employment with a competitor of the former employer in the Netherlands. After all, the non-competition clause expressly mentions “taking up employment with (...) in the Netherlands”. It makes no difference that the employee is also working from home (in the Netherlands). It does not appear from the wording of the non-competition clause that the employer wanted to prohibit the employee from joining a competitor, regardless of where this competitor is based. The Subdistrict Court arrived at the conclusion that although the employee has pushed the limits of the non-competition clause, he has not breached it.
Importance to Practice
It can be very important for an employer not to have a former employee join a competitor. This ruling shows that the wording of a non-competition clause has great significance if a disagreement arises between employer and employee about the interpretation of the non-competition clause, especially if this clause was drafted unilaterally by the employer. Employers would therefore do wise to set out clearly in a non-competition clause what the employer is not allowed to do after the end of the employment agreement. The new reality of hybrid working is also relevant here, because it makes it easier for employees to take up employment with competitors that are based further away.
