The validity of the (non-)non-compete clause

A non-compete clause is one in which the employee undertakes, upon leaving the company, not to engage in similar activities. Either by operating his own business or by joining a competing employer. This could allow the employee to harm the company he has left by using for himself or for a competing firm the knowledge specific to that company, which he has acquired in the industrial or commercial field in the company.

Many employment contracts include a non-compete clause, but is the non-compete clause in your employment contract valid? After all, a non-compete clause must meet several conditions for it to be legally valid.

The terms of validity of a (general) non-compete clause

To be valid, the non-compete agreement must meet the following conditions:

Written: The clause must be established in the employment contract or an addendum, either at the time of hiring or later.
Gross annual salary: the clause must relate to an employment contract in which it (including benefits acquired under the contract) exceeds 39,353.00 EUR (amount applicable from January 1, 2023) at the time of termination of the contract (= wage condition).

Here the following distinction applies:

Gross annual salary between 41,969.00 EUR and 83,939.00 EUR (amounts applicable as of January 1, 2024): the clause is valid only when a collective bargaining agreement has been concluded designating the positions for which a non-compete clause may be applied (e.g., in the hotel industry - PC 302)
Gross annual salary of more than 83,939.00 EUR: the clause is always valid except for positions excluded by collective bargaining agreement.

If the gross annual salary does not exceed EUR 41,969.00 then the non-competition clause is considered non-existent.

The clause must relate to similar activities and is consequently void if any activity at a competitor is prohibited. Similarity refers to both the position and the activities of the prospective employer (e.g., selling bicycles is not equivalent to selling cars)
The clause must geographically limited be to the places where the employee can actually compete with the employer and in no case outside the national territory.
The clause must not run longer than 12 months from the day the employment ended.
The clause must provide for the payment of a sole and lump sum compensatory allowance by the employer if, within 15 days of the end of the employment contract, he does not waive the effective application of the non-competition clause.
- The minimum amount of this compensation is equal to half of the employee's gross salary corresponding to the period of application of the clause (at least 1/2 of the gross salary of the term of the clause).
- Example: a non-competition clause is provided for 1 year. The compensation is at least 6 months of gross salary.

These conditions are cumulative and prescribed under penalty of nullity of the entire clause. If one of them is not met, the entire non-competition clause is null and void.

Here, the terms of validity of a non-competition clause aim only to protect employees, so that only they can invoke the nullity of the clause.

Finally, it is important to note that a non-competition clause has no effect if the employment contract is terminated during the first 6 months from the start of the contract.

Please note: Different rules apply to the deviating non-competition clause for commercial representatives and the deviating international non-competition clause.

Would you like more information about this or to be assisted by a specialized lawyer? Please feel free to contact us at info@bannister.be or at 03.369.28.00