The Dutch government has proposed significant changes to the rules on non-compete clauses. The proposal follows concerns that non-compete clauses are often included as standard wording in employment contracts, even where there is no clear need for such a restriction.

What is expected to change?

Under the legislative proposal, the use and enforcement of non-compete clauses would become subject to stricter requirements:

  • Non-compete clauses may be enforced for a maximum period of one year following termination of employment.
  • Employers must specify the geographical scope of the restriction.
  • Employers will be required to justify the necessity of the non-compete clause in all employment contracts, rather than only for fixed-term contracts.
  • Employers seeking to enforce a non-compete clause must pay the employee financial compensation during the restricted period. The proposed compensation amounts to 50% of the employee’s last monthly salary for each month the restriction applies. For example, a six-month non-compete period would entitle the employee to compensation equal to three months’ salary.

These rules are generally also expected to apply to other restrictive covenants that limit the employee’s ability to work after termination of employment, such as certain relationship clauses and non-poaching clauses. The Dutch government has expressly indicated that a relationship clause prohibiting an employee from working for or with clients or business relations of the former employer falls within the scope of the proposal.

Practical impact for employers

The proposed reforms could significantly increase the cost and administrative burden associated with non-compete clauses. Employers will therefore need to reassess the use of restrictive covenants for each category of employees. In practice, non-compete clauses are likely to be justified only for key employees, senior management and employees with access to confidential information, client relationships or strategic business knowledge.

On 29 June 2026, the legislative proposal was submitted to the Advisory Division of the Council of State (Raad van State). The proposal may still be amended following the Council of State’s advice. The government aims to submit the bill to the Dutch Parliament by the end of 2026.