Non-competition clause: What with a non-competition clause which exceeds the admitted duration?

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Date:
24 Feb 2015

In a decision of 23 January 2015, the Supreme Court stated that the trial judge, asked to rule on the nullity of a non-competition clause of an independent worker which exceeds the admitted duration, has to take into account the agreement's clause which limits the scope of the nullity.

 

In the given case, parties had closed an agreement regarding the transfer of an undertaking which contained a non-competition clause with a duration of seventeen years. The agreement also stated that provisions which would be (partly or completely) null and void, would remain to exist in so far that this was legally permitted.

The Court of Appeal of Ghent ruled that seventeen years is an extremely long time. The clause as a whole was therefore incompatible with the freedom of trade and free enterprise and subsequently absolutely null and void.

However, the Supreme Court revoked the Court of Appeal.

The Court ruled that the judge has to temper the clause to the measure that it complies with what's legally permitted since the agreement stipulates that clauses which are (partly or completely) null and void remain to exist for the part they are legally permitted.

However, it has to be remarked that the given case didn't concern an employment contract!

 

> Action point

Agreements between independent workers which contain a non-competition clause should always stipulate that, if a clause would be (partly or completely) null and void, it continues to exist for the part that is legally allowed.