Non-solicitation clauses
A non-solicitation clause is an agreement between an employee and his/her employer, prohibiting the employee from taking up employment with a competing business or from having direct or indirect commercial contact with the former employer’s customers and other business relations upon termination of the employment.
The rules on non-solicitation clauses have been changed continuously, and latest, they were introduced in the Danish Act on restrictive employment clauses, which came into force on 1 January, 2016. A non-solicitation clause must be assessed on the basis of the rules being effective at the time of agreement on the clause. The time of agreement is therefore crucial to the assessment of the validity and the scope of the clause.
When is a non-solicitation clause valid?
The current rules on non-solicitation clauses apply to all salaried employees, meaning that a non-solicitation agreement is only valid if:
- the agreement concerns customers with whom the employee has been commercially involved during the last 12 months prior to the date of termination;
- the employee has been in continuous employment with the employer during a consecutive period of at least 6 months;
- the employee is entitled to compensation for the period covered by the non-solicitation clause;
- the employee is not bound by the clause for more than 12 months as from the date of resignation; and
- the employee receives the relevant information in writing.
By the end of the employment, howsoever terminated, a salaried employee having undertaken a non-solicitation clause must receive from the employer a list of the customers being subject to the non-solicitation clause.
Combined clauses
If the non-solicitation clause is combined with a non-competition clause, the clauses together are called a combined clause. In order for such combined clause to be valid, it must comply with the elements of a valid contract for both a non-solicitation clause and a non-competition clause, and the period of the combined clause may never exceed a maximum of 6 months.
HjulmandKaptain has extensive experience in advising on and drafting of non-solicitation clauses. Please feel free to contact us if you have any questions, or if you need assistance in connection with the drafting of a non-solicitation clause.
