Non-compete clauses: Everything you need to know!

Non-compete clauses: All the rules 

There are many different types of non-compete clauses. They are subject to very different rules. In order to know his rights, the litigant must distinguish the type of clause he has signed.

In order to help you see things more clearly, we propose below a series of practical sheets which explain in clear terms the rules applicable to the various non-compete clauses.

The following lines also present the different possibilities for litigants to use or dispose of non-compete clauses.

If you have any questions, please do not hesitate to contact us!

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Non-compete clause: get out of the uncertainty!

A non-compete clause is a clause in a contract between two people under which one person refrains from competing with the other – either as an employee or in a self-employed capacity.

To be valid, the clause must meet a number of strict conditions.

Litigation related to non-compete clauses is voluminous. This is undoubtedly due to the fact that the sudden termination of a collaboration in order to launch a competing activity is often perceived as a betrayal by the person affected. A certain amount of personal resentment – not always illegitimate – often finds its way into the legal actions that follow.

However, the rules are very different depending on the context in which they are applied. The best practitioners sometimes confuse the issue [1]It is important to identify the type of clause that concerns you.

For your guidance, we distinguish in the following two situations, depending on whether :

1. the contract is between two companies;
2. the contract between a worker and his employer.

For more information on the legality of your contract, select the sheet that corresponds to your situation below.

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1/ The contract binds two companies (including non-compete clauses concluded with an independent):

• Non-compete clauses between firms (companies or self-employed persons) are in principle illegal under the rules of commercial and antitrust law.
• An implicit non-compete obligation exists with regard to certain persons outside of any contract (in the case of the transfer of a business and directorships or management positions in companies);
• Non-compete clauses are subject to the rules of unfair competition law when they are invoked by the ex-employer against the new employer (poaching of staff bound by a non-compete clause) who has hired one of his ex-employees subject to such a clause;
• Finally, specific rules exist for the non-compete clause in the commercial agency contract (commercial agent – principal).

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2/ The contract between a (former) worker and his (former) employer:

In the worker/employer relationship, a distinction must be made between cases depending on the period in which the competing activities take place.

• During the employment relationship, by its very nature, a “tacit” non-compete clause is imposed on the worker (risk for workers who start a self-employed activity in a complementary capacity);
• After the employment contract, only employees who have expressly signed a non-compete clause are subject to reservations. Again, a distinction is made between two hypotheses:
  • The post-contractual non-compete clause may have been provided for in the employment contract. There are several types:
    • the non-compete clause in the employment contract, in general ;
    • the “international” non-compete clause (also known as a “derogatory” non-compete clause and reserved for companies with an international field of activity and/or with their own research department);
    • the non-compete clause for sales representatives ;
    • the non-compete clause known as the “schooling clause”;
  • The post-contractual non-compete clause may also have been concluded after the end of the employment contract. Their legality is questionable.

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Some procedural rules on non-compete clauses

It is not just a matter of being within your rights. It is still necessary to demonstrate this! The litigant must therefore make sure to respect elementary rules of procedure (or to seek effective advice). Below we set out some important procedural rules for the implementation of non-compete clauses:

• the rules on the limitation period for non-compete clauses ;
• proof of breach of the non-compete clause ;
• the sanction of the non-compete clause ;
• the penalty clause (which often sanctions the breach of non-compete agreements).

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Don’t confuse them!

Finally, the contractual non-compete obligation should not be confused with two similar situations. Let us make two useful clarifications here:

• Unfair competition is always prohibited; it makes it possible to punish the misappropriation of personnel even in the absence of a contractual non-compete obligation;
• Even if they are often combined and/or confused, non-compete clauses must be distinguished from exclusivity clauses. Whereas the non-compete clause aims at prohibiting the debtor from competing, the exclusivity clause aims at obtaining from the debtor that he devote all his efforts to his co-contractor.

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The various links in this fact sheet provide more information on the situation you are facing.

We usually provide references to useful readings at the foot of the page, for those of our readers who would like to go further. The sources below cover all the material mentioned in this fact sheet:

• C-E. CLESSE AND S.GILSON (eds.), La concurrence loyale et déloyale du travailleur, Limal, Anthémis, 2013.
• LECLERCQ, Les conventions de cession d’actions: Analyse juridique et conseils pratiques de rédaction, Brussels, Larcier, 2009.
• VANNES (ed.), Clauses spéciales du contrat de travail. Utilité – validité – sanction, Brussels, Bruylant, 2003, p. 223.
• PETIT, Droit européen de la concurrence, Paris, Montchrestien, 2012.
• WANTIEZ, Les clauses de non-concurrence et le contrat de travail, Brussels, Larcier, 2001.
• DE CORDT, Le statut du dirigeant d’entreprise, Brussels, Larcier, 2009.

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[1] Generally, the analysis is incomplete and does not consider all cases. See for example the standard non-compete clause in an employment contract (or here). The distinction between the different clauses is not always made.

The information is not necessarily wrong, but the litigant sometimes comes away with a confused mind.