Employee was not bound by unfair non-competition clause

A sales representative at a hardware chain was bound by a non-competition clause in his employment contract. When he resigned a few years later, the company informed him that the non-competition clause would be valid for three months. During those three months, he would receive 60 % of his monthly salary.

One month later, he became a sales manager at another hardware chain. As a result, the company wanted compensation for breach of the non-competition clause.

The Arbitration Tribunal found that the non-competition clause was unenforceable and rejected the company’s claim for compensation. The clause was too restrictive as the employee had not been employed in a senior role. Although he had gained insight into some company secrets, it was not enough to justify the financial burden of the clause.

IUNO’s opinion

The case is a good example of how it can be difficult for companies to enforce non-competition clauses against employees in non-senior roles. Although a non-competition clause is proportional in terms of duration and compensation, it can still be unfair in other ways.

IUNO recommends that companies carefully consider whether an employee can be covered by a non-competition clause. Enforceability will require that the employee be compensated and not overly restricted for future career opportunities, among other things. 

We have previously written about a case where a district court set aside a non-competition clause here.

[The Arbitration Tribunal in Inventor and Non-compete disputes’ decision of the 21 January 2025]