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I'm currently studying Physics with an ambition for doing research. As a side-job I am scheduled to start as a developer at a mid-sized domestic IT company tomorrow, based in the Netherlands. I see this as an exciting opportunity of getting introduced into software development at a company, instead of a side-job unrelated to my interests.

Now, I have been proposed the contract a week from my first work-day in advance, after having gone through two job interviews (one with HR and the scrummaster and another one with the CTO and a senior software developer).

In the past week I've talked to HR for some clarifications on some secondary terms of employment unrelated to the non-compete clause. All my questions where answered satisfactory.

But I don't really know what to think about the two-year non-compete clause formulated in the line of Within a timeframe of two-years after the employment termination, the employee is prohibited from conducting business in any way or have business interests or assist third parties, with or without compensation, if this has a relation to the employer's business.

Another clause goes on motivating the non-compete clause; i.e. because the company has made significant developments and R&D investments which allow it to be competitive in its market.

Since the contract isn't signed yet, I'm wondering if the the two-year non-compete is reasonable. And if it isn't, what effect this has for me in the long term. And what would be a reasonable action for me to take, having taken the previous two sentences into consideration?

Since my motivation for this job is fully learning-oriented on gaining experience, with no direct career ambitions in this field, I'm wondering how relevant this clause is to my situation.

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  • "if this has a relation to the employer's business." This is so vague, I wonder if such a clause is even enforceable. – FooTheBar Aug 6 '17 at 15:34
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    @FooBar unlikely to be, most non-compete clauses aren't. But it's best to simply ask to have the clause removed altogether and refuse to sign if they won't. The limitation it brings is never worth it. – Tymoteusz Paul Aug 6 '17 at 15:38
  • @FooBar I've heard before that the vague wording questions the enforceabilty. – Mussé Redi Aug 6 '17 at 15:47
  • @TymoteuszPaul I will probably want to bring it up. At the moment, I first want to get a sense of the relevance of the clause if I'll be working in research in an x amount of years. – Mussé Redi Aug 6 '17 at 15:48
  • You should speak to a lawyer if you want to know exactly how the clause will affect you or what might fall under the clause (or how enforceable it is). But it's more likely to be referring to whatever the company's main public-facing business(es) is as opposed to referring to "research". – Dukeling Aug 6 '17 at 16:04
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In most of Europe, non-compete clauses without compensation are not enforcable. I have no specific knowledge of the law in the Netherlands, but I'd be greatly surprised if they handled it differently. If you want to be 100% sure, it becomes a legal question*.

Because the clause is merely a scare tactic, some companies put it into all of their contracts by default. If they're aware it isn't enforcable, they shouldn't put up that much resistance if you ask to remove it.

And to answer the actual question: No, asking for a 2 year non-compete is not reasonable, because it prevents you from working in your field of expertise for an entire 2 years, possibly forcing you into unemployment. This goes against the interest of yourself, the state, and the industry you work in, which is why these clauses are usually not enforcable.

*In terms of legality, I notice there is no geographic scope to the non-compete, which in some jurisdictions makes the whole clause void anyway. I suggest asking a legal forum about the enforcability and validity of the clause in your jurisdiction.

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  • To expand the scope of my original question, what would be a reasonable action for me to take having acknowledged that the clause is not reasonable? – Mussé Redi Aug 6 '17 at 16:22
  • "Regarding clause XY, I do intend to continue working in this field and industry after I've finished my studies, and I fear this clause forbids me from doing so. Would you be open to removing this clause?" - All employment contracts are negotiable, and it's very common to change such clauses on request for individual employees. Even if they don't remove it, as I understand this clause it is invalid (a lawyer will likely confirm this for €100, and a union website may do so for free), which means the contract can be treated as if the clause weren't there. – Peter - Unban Robert Harvey Aug 6 '17 at 16:32
  • @MusséRedi While you're at it, a similar clause which is probably valid but can usually be removed by asking them to remove it is the one that gives them the rights to all the hobby projects you work on while in their employment. If that's in your contract, which is likely, best ask for that to be removed as well. Some universities actually offer a service to look at contracts to help you spot these things, and sometimes you can ask the secretary in your department. – Peter - Unban Robert Harvey Aug 6 '17 at 16:36
  • Yes, such a clause is indeed included in the contract. It's name is Prohibition of ancilliary activities. Its first subclause reads in the line of empolyee will refrain from activities for third parties, or for the employee's own account, similar to the employer's and have no direct or indirect association or financial interest to such activities without explicit written consent employer. – Mussé Redi Aug 6 '17 at 16:57
  • As an example, the work that I do for my current company is in one way something that thousands of others do. On the other hand, I work on a very specialised project that to my knowledge has only one competitor. So the interpretation or exact wording would either make me unemployable, or just stop me from working from one particular company. – gnasher729 Aug 6 '17 at 20:04
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It absolutely isn't reasonable and you should (almost) never sign a contract that has a non-compete clause. Unless maybe when it's specific enough to include a complete list of companies you are not allowed to work with and on termination, you would be handed a big bag of money, probably two years worth of wages. But even that looks like a bad idea to me. Personally, I also see it as a yellow card to how bad must be their structure that they require such practices to prevent employees from fleeing to a direct competitor.

Their trade secrets are already protected, without a need for such clause. Additionally, those clauses are rarely enforceable, although that depends strictly on phrasing and country that will be adjudicating a potential dispute.

So make it clear that you are happy to work with them, but you will not sign a contract with that clause in. If they refuse to budge, thank them for their time and keep looking, there will be better opportunities.

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  • Could you substantiate concrete reasons why the non-compete is not reasonable, given that they are in a fairly competitive marktet? – Mussé Redi Aug 6 '17 at 16:02
  • Also, technically, without a non-compete their trade secrets would not be legally protected, right? – Mussé Redi Aug 6 '17 at 16:04
  • Trade secrets would be absolutely protected without non-compete clause. You could work for a competitor, and when certain discussions happen, you would just have to keep your mouth shut. On the other hand, a non-compete clause doesn't protect trade secrets at all. If all that tried to protect them was a non-compete clause, then you could just send all their trade secrets to the nearest newspaper. – gnasher729 Aug 6 '17 at 20:00
  • "Also, technically, without a non-compete their trade secrets would not be legally protected, right?" - How do you figure that? Copyright, Trademark, and Patented IP all would be protected in any region of the world which would have those protections and if they don't then a non-compete clause isn't going to do then any good (because they have no protection anyways) – Donald Aug 8 '17 at 5:33

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