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    Non-compete clause to prevent employees from leaving

    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. Research institute Panteia recently published a report on this.

    Purpose

    A non-compete clause is an agreement between employer and employee included in the employment contract which prevents the respective employee from performing work in competition against the employer elsewhere during a certain period after leaving employment. In 2019, the lower house of parliament discussed the purpose of such a clause. In its current form, a non-compete clause restricts employees too much in finding new employment and employers often use it as a means to keep scarcely available staff working for their organization, rather than using it to prevent employees from working in competition against the employer elsewhere. Outgoing minister Koolmees of the Ministry of Social Affairs and Employment therefore decided to look into the matter. The results of his research have now been published. One in three employers includes a non-compete clause in employment contracts. And one in three employers uses the clause to prevent scarcely available employees from leaving the organization. This is not what the clause is meant for. However, employers state they see no alternative option to protect their company data and business relations. A few employer only include non-compete clauses in temporary contracts, a measure introduced at the start of 2020 by the Work Regulation Committee. Minister Koolmees is currently working on new policies. The next Cabinet of Government can then decide to enact changes according to these policies.

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