Contracts & Clauses
SØRENSEN LAWYERS reviews and localizes non-compete and other restrictive covenants for international employers, and advises on enforcement strategy for clauses already in place.
Non-Compete Clauses Are Being Overhauled: Is Your Template Still Enforceable?
Many international employers operating in the Netherlands still draft non-compete clauses the way their U.S. or UK headquarters always have: broad geographic scope, a multi-year term, no compensation, and a generic reference to protecting the company’s legitimate business interests. Under Dutch law, that template has always been on shakier ground than most legal teams realize, and a bill now working its way through the legislative process will make much of it unenforceable outright.
The Legal Backdrop Today
Under current Dutch law, a non-compete clause in a permanent contract is valid without any special justification, though courts can and do set it aside, in whole or in part, if it disproportionately restricts an employee’s ability to find new work relative to the employer’s actual interest. In fixed-term contracts, the law already requires written justification of a compelling business or operational interest, a requirement many standard templates simply don’t meet because they were drafted for a different legal system.
What the Bill Would Change
The proposed reform tightens the rules considerably, for permanent and fixed-term contracts alike.
- A maximum duration of twelve months after the employment relationship ends. Clauses running for two or three years, common in American-style templates, would no longer be valid for that length.
- Mandatory written justification of the specific business interest the clause protects, required for every contract, not only fixed-term ones as today.
- A defined geographic scope. Vague or effectively worldwide restrictions would no longer stand; employers must specify the actual area where the restriction applies.
- Compensation for the employee for as long as the employer enforces the clause: at least half of the employee’s last monthly salary for each month it applies.
- Automatic lapse of the clause unless the employer invokes it in writing before the employment ends, with advance notice to the employee.
Why Standard American Corporate Templates Won’t Survive This
Non-compete language drafted for a U.S. audience tends to share a specific set of features: an open-ended or multi-year term, broad or undefined territory, no compensation obligation, and boilerplate business-justification language that isn’t tailored to the actual role. Every one of those features is precisely what the new Dutch rules target. A clause built on that model is not merely at legal risk under the reform. Several elements of it are likely unenforceable, or at minimum will be read down by a Dutch court, well before the bill is even passed, since Dutch courts already scrutinize proportionality today.
For employers with a global template rolled out from a head office abroad, this is a case where one contract for every jurisdiction quietly stops being an efficiency and starts being a liability.
Where the Bill Stands Right Now
As of this writing, the bill has not been enacted. It was submitted to the Advisory Division of the Council of State in June 2026, and the government has indicated it intends to submit the bill to the House of Representatives toward the end of 2026. No effective date has been set, and the proposal must still clear both chambers of parliament. Employer organizations have pushed back on the flat 50% compensation requirement, while unions argue the reform doesn’t go far enough for employees on probation. Expect the details, though probably not the core structure, to move before final adoption.
Practical Steps to Take Now
- Audit existing non-compete clauses against the proposed twelve-month cap, geographic-specificity requirement, and compensation rule, rather than waiting for the bill to pass.
- Start drafting role-specific justification language now, rather than relying on generic legitimate-business-interest boilerplate. This is good practice under current law too, not only future law.
- Model the compensation cost of enforcing non-competes for key roles, so finance and HR aren’t surprised when a clause is actually invoked.
- Flag the divergence to headquarters legal teams that maintain a single global template. The Dutch version will need to be a genuine local variant, not a translated copy.
- Review existing employees’ clauses for transitional exposure once the bill’s final text and commencement date are known.
American-style templates vs. the new Dutch standard
| Contract element | Typical American template | New Dutch requirement |
| Duration | Multi-year or indefinite | Maximum of twelve months |
| Compensation | None | At least half salary for each month enforced |
| Geographic scope | Broad or undefined | Must be specifically defined |
| Justification | Generic boilerplate | Written and case-specific, required for every contract |
Quick answers
Has the non-compete reform become law?
Not yet. It is under advisory review and expected to reach parliament toward the end of 2026.
Does the reform apply only to new contracts?
The final bill will clarify this, but employers should assume existing clauses may also be affected once it takes effect.
Can we still use a non-compete clause today?
Yes, but it must already meet the proportionality standard, and for fixed-term contracts the written-justification standard, under current Dutch law.
When to involve legal counsel
Before finalizing any senior hire’s contract: confirm the clause meets the proportionality standard Dutch courts already apply today, not only the standard the bill will eventually impose.
Before enforcing an existing non-compete against a departing employee: check duration, compensation exposure, and whether the justification on file would hold up if challenged.
Before rolling out a global template to Dutch entities: treat the Dutch version as a local variant that needs its own drafting, not a translated copy of the head office standard.
SØRENSEN LAWYERS reviews and localizes non-compete and other restrictive covenants for international employers, and advises on enforcement strategy for clauses already in place.