The Legislative to Modernize the Non-Competition Clause

Do you, as an employer, include non-compete clauses in your employment agreements with employees? If so, it is important to be aware of the changes contained in the legislative proposal for the modernization of the non-compete clause. On 26 June 2026, this legislative proposal was submitted to the Council of State for advice. If implemented, the changes will have significant practical consequences for the validity and application of non-compete clauses.

Objective of the legislative proposal

Currently, 1 in 3 employees has a non-compete clause in their employment agreement. According to the government, the current regulations regarding non-compete clauses lead to an unjustified restriction of employees’ labor mobility. The objectives of this legislative proposal are therefore to promote labor mobility, freedom of choice of work and optimal allocation of labor, to better balance the interests of employers and employees, to make the rights and obligations applicable to employers and employees clearer in advance so that fewer disputes need to be brought before the courts, and to maintain the possibility for employers to protect their business interests.

Current Situation

Current legislation regarding non-compete clauses offers employers a relatively high degree of freedom. At present, there is no statutory maximum term for non-compete clauses. Including a geographic scope for the clause is optional. In fixed-term employment contracts, the employer must provide a reasoned explanation of the compelling business interest that makes the non-compete clause necessary, but for indefinite-term contracts, this compelling interest is not required. Under current law, the court may award compensation if a non-compete clause unreasonably hinders the employee from finding a new job. For more information on this topic, read our blog post about non-compete clauses.

Contents of the legislative proposal

The most significant changes in this legislative proposal are:

• A non-compete clause may remain in effect for up to 1 year after the end of the employment contract.
• The geographic scope within which the employee is prohibited from working must be specified and justified in the non-compete clause.
• The duration of the non-compete clause must be specified and justified in the clause itself.
• An employer must pay the employee compensation if the employer invokes the non-compete clause; this amount is equal to 50% of the employee’s last monthly salary for each month that the non-compete clause is invoked.

What are the consequences for employers?

For the time being, the legislative proposal has not yet completed the legislative process and therefore has no consequences. If this legislative proposal enters into force, non-compete clauses that were validly agreed before the entry into force of the proposal will remain valid. The current law will continue to apply to the formal requirements of those clauses.

However, the provisions relating to the manner in which reliance may be placed on a non-compete clause and the obligation to pay compensation will also apply to non-compete clauses agreed before the entry into force of the proposal. The employer will only be able to invoke the non-compete clause for a maximum of one year after the end of the employment agreement and must pay the associated compensation to the former employee during the period in which the clause is enforced.

The practical effect once the legislative enters into force

Suppose an employee has a non-compete clause in his one-year fixed-term employment contract, which he agreed to on June 1, 2026. If this bill were to take effect on January 1, 2027, and the employment contract were to end on June 1, 2027, the employer must, no later than one month before the end of the employment contract—that is, before May 1, 2027— notify this employee in writing that the employer will invoke this clause and for what duration (maximum 12 months). The employer cannot deviate from this later. If the employer opts for a 6-month period, they will have to pay their former employee 50% of the last monthly salary earned each month during those 6 months.