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If an employee of company A in the Netherlands with a non-compete clause quits before transfer of undertaking for the legal merge with company B(overgang van onderneming), would the non-compete clause still be in effect?

Here's the timeline of events:

  1. Employee signs contract with company A
  2. Company B signs to buy parent of company A to be executed on Day X
  3. Employee quits shortly before the planned transfer of undertaking (Day X-1)
  4. The Transfer of undertaking happens, transferring all rights and obligations of Company A to Company B
  5. Company A is closed down.

Could the non-compete that the employee had with company A be enforced by Company B after closing?

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  • It would be useful to include the exact language of the clause even if it is in Dutch. The description is unclear about the scope and duration of the constraint(s). Aug 26, 2022 at 11:15
  • Didn't the clause them intentionally to make the question more generic.
    – user46504
    Aug 29, 2022 at 15:27
  • "Didn't the clause them intentionally to make the question more generic." The exact terms of a clause often make a difference with respect to a generic scenario. Aug 29, 2022 at 18:14

1 Answer 1

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From point 4:

transferring all rights and obligations of Company A to Company B

Among those rights and obligations are the rights and obligations arising from Company A's agreement with Employee. Employee is therefore still subject to the agreement, which is enforceable by Company B.

If the agreement is carefully drafted, it will make explicit mention of Company A's "successors in interest" or some similar phrase or phrases. Even if there is no mention, the rights and obligations associated with this agreement will transfer (perhaps unless the agreement explicitly provides that they will not, but, let's be realistic, of course it does not so provide).

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