THE BOTTOM LINE
- Every Day Counts: The exact end date of an employment contract is crucial for calculating non-compete periods. The court found that asking an employee to work a few extra days after their official termination date did not extend the one-year restriction.
- Proving Competition is Your Burden: An employer must provide robust evidence that a new company is a direct competitor. Simply showing an overlap in product categories may be insufficient if the core business models (e.g., parallel trade vs. exclusive distribution) are different.
- Clauses Can Carry Over: A non-compete clause from a fixed-term contract can remain valid when the contract is converted to a permanent one, even without being explicitly re-signed, as long as the employee’s role does not substantially change.
THE DETAILS
This case involved VCT Holding B.V. (Van Caem), a company in the international parallel trade of consumer goods, and a former Trader. After resigning, the employee joined two different companies within a year. Van Caem sued, claiming violation of a one-year non-compete clause and demanding significant penalties. The court first confirmed that the non-compete clause itself was legally valid. It had been included in the employee’s initial fixed-term contract and remained in force when the agreement was converted to a permanent contract via an addendum, as the employee’s duties had not significantly changed. This serves as a reminder that such restrictive covenants can have a long lifespan if contracts are structured correctly.
The employer’s entire case, however, unraveled on the details of timing. The employee resigned effective March 31, 2024, meaning her one-year non-compete period expired at the end of March 31, 2025. While she had worked a few extra days in early April 2024 at the company’s request, the court ruled this did not formally extend the employment contract or, crucially, the non-compete period. The court deemed it unreasonable to extend the restriction by a full month for just a few days of additional work. Consequently, when the employee started at an undisputed competitor (Boost) on April 1, 2025, she was no longer bound by the clause.
Before joining the clear competitor, the employee had a short stint at another company (Bickery) while the non-compete was still active. Here, Van Caem’s claim failed on the burden of proof. The court found the employer’s evidence that Bickery was a competitor to be “meager.” Van Caem engaged in parallel trade, while Bickery operated as an importer and distributor, often with exclusive agreements. The employee successfully argued their business models were fundamentally different. The ruling underscores that it is the employer’s responsibility to concretely prove competitive activity, a burden that was not met here, leading to the complete dismissal of all penalty claims.
SOURCE
Source: Rechtbank Amsterdam
