Legislative Proposal to Reform Dutch Non-Compete Rules Advances to Next Stage

Legislative Proposal to Reform Dutch Non-Compete Rules Advances to Next Stage

On 26 June 2026, the Dutch government took the next step in its proposed reform of the statutory framework governing non-compete clauses. The legislative proposal to modernise Dutch non-compete rules has been submitted to the Advisory Division of the Council of State (Afdeling advisering van de Raad van State) for its opinion, marking an important milestone in the legislative process.

This does not mean that the current rules have changed. The Advisory Division will first issue its opinion on the proposal. Only then can the proposal, with or without amendments, be submitted to the House of Representatives (Tweede Kamer). Nevertheless, the proposal is relevant for employers, as the proposed changes could significantly affect the way non-compete clauses are drafted and enforced under Dutch employment law.

Why is reform considered necessary? 

The proposal reflects the government’s view that non-compete clauses are too often included as a standard contractual provision, even where there is no genuine need for them. This may unnecessarily restrict employees’ ability to move between employers and reduce labour mobility. At the same time, employers must remain able to protect legitimate business interests, such as confidential business information, know-how and customer relationships.

The proposal therefore seeks to strike a better balance between the interests of employers and employees while limiting the use of non-compete clauses to situations in which they are genuinely necessary.

Key proposed changes

 The legislative proposal introduces a number of significant changes.

• Written justification for all employment agreements

Under the current rules, a non-compete clause in a fixed-term employment agreement is only valid if the employer provides a written justification demonstrating that the clause is necessary to protect compelling business or service interests. The proposal extends this requirement to employment agreements for an indefinite period. Employers would therefore be required to provide a written justification for every non-compete clause.

• Maximum duration of twelve months

The proposal limits the duration of a non-compete clause to a maximum of twelve months following the termination of the employment agreement.

• Defined geographical scope

The geographical scope of the non-compete clause must be expressly included in the clause and supported by a written justification.

• Timely written notice

Employers will no longer be able to rely automatically on an agreed non-compete clause. Instead, they must notify the employee, in writing and within the prescribed timeframe, that they intend to invoke the clause and specify the period for which it will apply.

• Mandatory compensation

Where an employer invokes a non-compete clause, it must pay the employee compensation equal to 50% of the employee’s last monthly salary for the period during which the restriction applies. If the compensation is not paid on time, the non-compete clause will cease to have effect.

Practical implications for employers 

For the time being, the current legal framework remains in place. The proposal is still at an early stage of the legislative process and may be amended following the opinion of the Advisory Division of the Council of State. It remains to be seen whether, when and in what form the proposed changes will ultimately enter into force.

Although no immediate action is required, employers should consider taking this opportunity to review their approach to non-compete clauses. Are they included only where they are genuinely necessary to protect legitimate business interests, or have they become a standard feature of employment agreements?