Published On: Wed, Feb 28th, 2018

Non-Competition clause and relationship clause

lawyerWILLEMSTAD - The Joint Court of Justice sworn in two new lawyers in Curaçao on February 27, 2018. These two lawyers are C. van der Slikke and C.A.W. van den Broek. According to good practice, a speech was given by the President of the Court Jan de Boer ("edifying words in the general interest"), as a homage to the new lawyers. This time he dwelt on the subject of non-competition clause and relationship clause.

According to Mr. De Boer, some people in Curaçao - especially employers and their attorneys - have the idea that a non-competition clause is not allowed (because this is illegal in the law), but a relationship clause is allowed. This idea is wrong according to him.

In the case of a non-competition clause, one must think of a clause in the employment contract that forbids working after the end of the employment contract (for a certain period) in the same branch (independently or in employment with a competitor). For example, a mechanic at a garage or a lawyer in employment may not work as a mechanic or solicitor independently or in employment after the employment contract has expired and thus compete with the former employer. This stipulation is certainly forbidden in the law.

A relationship clause prohibits the employee from approaching or operating clients of the employer (for a certain period) after the termination of the employment contract. A relationship clause can be seen as a non-competition clause. According to some (especially employers), this stipulation is valid, given the legal text.

What does the law say? Article 1613v of Book 7A of the Civil Code states (since 2000):

“Any stipulation in which the laborer is limited for a certain period of time to work in a certain way after the end of the employment is null and void.”

An absolute ban is given here, unlike in the Netherlands.

Some believe that the words 'work in a certain way' only refers to the nature of the work, e.g. working as a mechanic, lawyer, accountant, etc.

This is incorrect according to Mr. De Boer. The words also apply to the recruitment of customers.

The intention of the statutory prohibition is to protect the employee, especially in small Curaçao. The right to work choice is fundamental. How should a former employee in Curaçao earn a living if he is bound by competition and relationship clauses? This intention of the legislator in 2000 leads to a broad interpretation of the legal text.

Recently the Supreme Court in a Dutch case (the Dutch law uses the same words as Curaçao, even if there is no absolute prohibition in the Netherlands) decides that the words 'to be working in a certain way' also refers to a relationship clause (HR 3 March 2017, under ECLI: NL: HR: 2017: 364).

However, it is true that the active liaison of relations of the former employer may be unlawful (Section 6: 162 of the Dutch Civil Code). But the passive service of those relationships - because they are satisfied with you and want to come with you - is not unlawful.

Mr. De Boer concluded his speech with the words: “So, Ladies and gentlemen if you were employed as a lawyer and you are confronted with a relationship clause when you leave: don’t worry about it.”

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