In non-solicitation clauses, business partners agree not to “take away” employees from each other. In the case of “non-hiring”, it is agreed not to actively or passively employ employees of the other contracting party. In the case of “non-approach”, it is agreed not to actively approach employees of the other contracting party.

 

There are good reasons to include a non-recruitment clause in a cooperation contract. For example, in a joint research project, key personnel will only dare to be assigned to the project if they are sure that the other party would not poach these good employee(s). Also, no one will allow an employee to work at a customer’s premises if there is reason to fear that this employee can be courted.

 

 

The EC published a policy brief in May 2024 in which the EC takes a new position that non-acquisition agreements are generally considered, by their nature, to be a restriction of competition under Article 101 TFEU. This article prohibits commercial practices between EU countries that may prevent, restrict or distort competition.

 

According to the EC, non-recruitment agreements reduce the dynamics of the labour market, with negative consequences for employee compensation, company productivity and innovation. Usually an employee does not know anything about this either. It is arranged overhead, as it were, so that the employee has not factored in any compensation for the limitation of possible future vacancies.

 

This new position has not yet passed the test of the European courts and it remains to be seen to what extent this change of course will hold.

 

 

In any event, this new position does not imply that non-recruitment clauses are always null and void.

 

If the clause is (i) a minor element of a main transaction that does not restrict competition, (ii) is proportionate to that main transaction and (iii) is objectively necessary for the execution of the main transaction, then the clause would be legally valid and enforceable even under the EC’s new position.

 

‘Objective’ means that, given the nature of the main operation and the characteristics of the market, undertakings in a comparable situation would not have participated in the main operation in the absence of the restriction in question. “Necessary” requires that the main transaction would have become impossible without the restriction.

 

 

Although the EC has only made a statement, it is important to pay the necessary attention to the description and explanation of a non-recruitment clause and not to include it as an ill-considered standard clause in a contract.