Arnhem-Leeuwarden Court of Appeal, 3 March 2026, ECLI:NL:GHARL:2026:1297.
Facts
The employee started working for the employer on 1 January 2011 in a role involving graphic design and digital archiving. His employment contract included a non-compete clause. The employee had a work limitation and received a Wajong benefit (Dutch disability benefit for young people) in addition to his salary.
The employer had several subsidiaries. One subsidiary operated under the brand name Brandom. Over the years, the employee’s duties changed: whereas he initially carried out work for the employer, his graphic design work was later, in practice, carried out for a subsidiary and the Brandom brand.
In 2022, the employee’s director and supervisor passed away. Shortly afterwards, the employee reported sick. The employee then transferred hosting details and data to his spouse and resigned. Around the same time, the employee’s spouse set up her own business.
A substantial dispute subsequently arose between the parties. The employer argued, among other things, that the employee had breached the non-compete clause, had competed unlawfully, had breached the confidentiality clause, had wrongfully transferred data, and had caused damage by destroying administrative records and backups. The employee, in turn, argued that the employer had not acted as a good employer and that promises had been made to him.
Ruling
The Court of Appeal first ruled that the non-compete clause in the employment contract with the employer (the parent company) did not automatically also apply in relation to the subsidiary. It was relevant here that these were separate legal entities. The fact that the employee, in practice, carried out work for the subsidiary and Brandom did not mean he should reasonably have understood that the non-compete clause agreed with the employer also covered this. According to the Court of Appeal, it was up to the employer to agree a new or adjusted non-compete clause when restructuring and transferring activities.
The Court of Appeal ruled differently on the confidentiality clause. The employee had submitted documents in the proceedings that fell under a confidentiality agreement. According to the Court of Appeal, this breached the clause, even though the documents were submitted in court proceedings. The agreed penalty was awarded.
The employer was also largely successful regarding the data. The employee was not authorised to transfer that data to a third party and must still hand over the passwords, tokens, and other access credentials, subject to a penalty payment.
What does this mean for employers?
This ruling shows that a non-compete clause must be carefully structured, particularly within a group of companies. A non-compete clause concluded with a holding company cannot automatically be relied on to protect a subsidiary. Employers would therefore do well, during reorganisations, restructurings, or shifts in work, to explicitly assess whether existing employment conditions, and a non-compete clause in particular, still legally match the actual situation.
At the same time, this ruling shows that employees who use confidential information or transfer company data and access credentials without authorisation can indeed be liable for the resulting damage. A confidentiality clause, too, can be interpreted strictly. In principle, “third parties” includes anyone other than the parties themselves, including the court.
Do you have questions about a non-compete clause, confidentiality clause, or disputes following termination of employment? Please contact one of our employment lawyers.
Click here for the full ruling (in Dutch).
