A posted employee is not bound by a non-competitionor non-solicitation clause in his employment contract under all circumstances. The prohibition of obstruction may ensure that the clause does not stand and the employee can be employed by the hirer.
Secondment, or 'hiring out', occurs in many different industries. For example, many employees in ICT are loaned out by their employer to another company (the hirer). These seconded employees usually perform their work at the location of the user company and build up a relationship with the company and the employees of the user company. If the ICT employee is subsequently so satisfied that he or she wishes to enter the user company's employment or continue working as a self-employed person, the employer will usually prohibit him or her from making the switch. This is because a non-competition or non-solicitation clause is included in the employment contract and the employee must pay high penalties for violating it.
Solution for the employee: the WAADI
If litigation takes place concerning the non-competition or non-solicitation clause in the employment contract of the posted employee, it usually does not stand up. The Workforce Allocation Act (WAADI) contains a prohibition on obstructions. This prohibition on obstructing employment stipulates that the employer who posts an employee may not obstruct the employee's ability to take up employment with the user company (the party where the employee is actually working). A non-competition clause and a non-solicitation clause are considered to be prohibited obstacles. If the WAADI applies, this certainly gives the employee options. However, simply ignoring the non-competition clause remains too great a risk given the high penalties involved.
When the WAADI?
To be able to invoke the prohibition on obstructions from the WAADI, a number of conditions must be met. For example, it is necessary that the employee performs his work for a third party (hirer/client) and that the employer receives compensation for this. In addition, it is required that the work is carried out under the management and supervision of this hirer. The latter is often the main point of discussion in court cases.
Also for freelancers
The Supreme Court has ruled that seconded employees who wish to continue their work as ZZP'er may also rely on the ban on obstructions. However, it must be assessed on a case-by-case basis whether the intended ZZP construction meets a number of conditions.
Solution for the employer?
Our lawyers assist employers who wish to prevent their staff from working for their clients despite a non-competition and non-solicitation clause. There are various possibilities for this, which offer more security than the non-solicitation clause. It is important, however, to arrange this properly before the employee is loaned out.
Questions about your competition clause
Do you have questions about your non-compete agreement, the WAADI or other employment law issues? Then contact our employment law specialists.