Definition and Types of Restrictive Covenants
A restrictive covenant is a clause included in the (signed) employment contract that prohibits the employee from engaging in certain activities for a specified period of time. The clauses must be written down in a language the employee understands.
The following restrictive covenants are recognised and may be enforceable under the law:
- Non-compete clauses;
- Non-solicitation clauses;
- A secrecy clause.
Enforcement of Restrictive Covenants—process and remedies
A restrictive covenant can be enforced in Court if an employee does not comply with the restrictions, which follow from contract. In Court, it will first be decided whether the restrictive covenant in the employment contract is valid, and secondly, whether the employee breached it.
Use and Limitations of Garden Leave
In principle, garden leave is not a concept recognised under Dutch law. Unilaterally releasing an employee of his/her duties without the employee’s consent, is prohibited. If an employee does not agree to a release, the employer can suspend the employee. However, the employer should be able to substantiate the reason behind the suspension and if a fair reason is not in place, the employee can claim reinstatement (even in Court). The main question is what a “good employer” would do in a similar situation. If a good employer would have never reasonably given a release/suspension in this situation, it would be unlawful for the employer to do so.