International Law

COVENANTS NOT TO COMPETE IN THE DUTCH CARIBBEAN

By Karel.Frielink

Such covenants are null and void

A non-competition clause, a.k.a. a covenant not to compete, is a stipulation between the employer and the employee whereby the latter is restricted in his right to work in a given way upon termination of the latter?s contract of employment. Typically, a non-competition clause will prohibit an employee from seeking employment, or being directly or indirectly involved in the same type of industry or business conducted by another employer. According to the laws of the Netherlands Antilles, any non-competition clause related to an employment contract is null and void and thus not enforceable. This means that the former employee is at liberty to compete with his former employer.

However, it is generally held that non-solicitation clauses are valid. Such clauses restrict the employee in approaching customers or other employees of his employer after the termination of his or her contract. Therefore, a former employee may not, for instance, systematically approach and coax away his former employer?s customers, or his former employer?s employees. Even in the absence of such a clause, the former employee may nevertheless be committing a wrongful act (tort) by approaching such customers.

Confidentiality clauses are also frequently included in employment contracts. It is a criminal offence for an employee to intentionally divulge confidential information of an active company if he has been instructed and is required to keep such information confidential. In practice, however, it is very difficult to ascertain whether any confidential information has actually been passed on to a third party by a former employee.

Karel Frielink
Attorney (Lawyer) / Partner

Full post as published by Karel's Legal Blog on October 04, 2008 (boomark / email).