Bill to Modernize the Non-Compete Clause Submitted to the Council of State

Less Scope for Standard Non-Compete Clauses

On 26 June 2026, the Dutch Council of Ministers approved the Bill to Modernize the Non-Compete Clause. Following this approval, the Minister of Social Affairs and Employment, Minister Vijlbrief, submitted the bill to the Council of State for advice. Preparatory work on the bill began as early as 4 March 2024, with the aim of fundamentally reforming the Dutch non-compete clause regime and giving employees greater freedom to change jobs.

According to the Dutch government, non-compete clauses are too often included as a standard provision in employment contracts, even where there is no genuine business need. Currently, approximately one in three employees is subject to a non-compete clause, despite many of them having no access to confidential business information or other legitimate business interests that would justify such a restriction. The proposed legislation therefore seeks to strike a better balance between protecting employers' legitimate business interests and promoting labor mobility.

Stricter Requirements for Employers

The bill introduces several important restrictions on the use of non-compete clauses. Under the proposed rules, a non-compete clause may apply for a maximum period of one year and must explicitly specify the geographical scope of the restriction. In addition, employers will be required to pay compensation if they choose to enforce a non-compete clause against a former employee. The government intends this requirement to discourage employers from including or invoking non-compete clauses as a precautionary measure where no genuine business interest exists.

What Does This mean for Employers?

Although the bill is still progressing through the legislative process and must first be reviewed by the Council of State before being submitted to the Dutch House of Representatives, employers would be well advised to start reviewing their current use of non-compete clauses. In particular, employers should assess for which positions such clauses are genuinely necessary and whether less restrictive alternatives, such as confidentiality clauses, would provide sufficient protection. If the proposed legislation is adopted, including a standard non-compete clause in every employment contract will no longer be the default approach.