Three employees who secretly set up a competing business and took their employer’s confidential documents with them were ordered to pay contractual fines totalling €1,025,000. The subdistrict court (kantonrechter) of the District Court of Zeeland-West-Brabant did reduce the fines considerably, because the employer had hardly substantiated its actual loss (13 May 2026, ECLI:NL:RBZWB:2026:5158).
The ruling holds lessons for employers who want to protect sensitive information, and for employees who are thinking of starting out on their own. Below we set out the facts, the court’s reasoning and what you can learn from it.
What happened in this case?
The employer lays subsea power cables for offshore wind farms. Three employees prepared a competing business while still employed and used the employer’s documents to win tenders.
It is a highly specialised market with only a handful of players worldwide and cable-laying vessels that cannot be used for anything else. The employer owned one such vessel and acquired a second in 2022, partly with a view to the growing American market.
The three employees were a project manager, a tender engineer and a tender coordinator. Each employment contract contained a non-compete clause (concurrentiebeding), an ancillary-activities clause (nevenwerkzaamhedenbeding), a confidentiality clause, a company-property clause and a penalty clause. The penalty clause provided for a fine of €25,000 per breach plus €2,500 for each day the breach continued, without a maximum.
The tender engineer left on 1 August 2022, the tender coordinator on 1 August 2023 and the project manager on 1 October 2023. Through their roles, all three had access to commercially and technically sensitive information: the pricing structure of tenders, working procedures, investment plans and project documentation.
How did they prepare the competing business?
As early as 2021, the project manager and the tender engineer held regular online meetings about their new business. In April 2022 they incorporated a company in the United States and set up a website offering the same services as their employer.
They approached ship designers from their work email addresses, invited the employer’s business contacts to meetings at the employer’s expense and approached investors while presenting themselves as representatives of their then employer. Shortly before leaving, the tender engineer suggested in a chat message that his colleague should carefully take documentation, such as method statements and procedures, that could be useful to them. The project manager replied that he was already on it.
The project manager then downloaded confidential documents to his personal Dropbox account, including the complete investment plan for the new cable-laying vessel. That document contained technical specifications, market analyses and financial details.
The tender coordinator was engaged by her former colleagues to prepare a tender for the new business for a wind farm operator. It was the same tender she was working on for her employer at that time. The day after his employment ended, the project manager appeared at an offshore trade fair in the United States on behalf of the new business.
What did the forensic investigation show?
The employer engaged a digital forensic investigator to examine the returned laptops and accounts. The investigation found a very large number of digital traces relating to the preparation and start-up of the competing business.
The new business had copied passages from the employer’s documents word for word into its own tenders. The employer’s documents had also been used as a reference for pricing. Chat messages, cloud storage logs and meeting notes later proved decisive in court.
How did the court assess the competition defence?
The court held that the new business was a competitor, even though it had no vessel or paying clients yet. It had registered for the same tenders as the employer, both inside and outside the United States.
The former employees argued that their company was only an idea and was aimed at the American market, which they said was closed to foreign cable layers under the Jones Act, the US law that reserves certain domestic shipping to US vessels. The court rejected that argument: cable laying falls outside the Jones Act, so foreign cable-laying vessels may operate in American waters. The fact that the new business did not yet have a vessel in service did not mean there was no competition.
Had the employer waited too long?
No. The former employees argued that the employer had lost its rights by waiting too long (rechtsverwerking). The court stressed that the mere passage of time is not enough; there must be special circumstances that gave the employees a justified expectation that the employer would not enforce its rights.
On 6 February 2024 the employer had written to the two men and expressly stated that it would enforce the contractual clauses, including the penalty clause. That was sufficient. There was no ground for a justified expectation that the claim would not be pursued.
Did an oral assurance from HR help?
No. The employees said an HR officer had told them the non-compete clause was only a formality and would not be enforced. The employer disputed this, and the employees could not prove it, so the court rejected the defence.
Which clauses did the employees breach?
The court found that the project manager and the tender engineer breached the non-compete clause, the ancillary-activities clause, the confidentiality clause, the company-property clause and the employer’s code of ethics. The tender coordinator breached the confidentiality and company-property clauses by copying business documents.
According to the ruling as we read it, the breaches of the non-compete and ancillary-activities clauses were treated as one, because a reasonable interpretation of the contract means the same conduct should not be fined twice. The court placed the start of the competing activity at the moment the new business’s website went online in June 2023. From then on, it was no longer mere preparation but economic activity.
The tender coordinator had on two occasions copied her employer’s business documents almost word for word into material for the new business, including a local content plan and a hazard identification and risk assessment document.
Why did the court reduce the fines?
Because the fines, calculated under the contract, ran into millions of euros per person and bore no relation to the loss the employer had shown. Under Article 6:94 of the Dutch Civil Code (BW), the court may reduce a contractual penalty if fairness manifestly requires it.
The court took several factors into account. The employer had substantiated only a limited loss, of around €55,000. The penalty clause had no maximum. And the fines were out of all proportion to the salaries of the employees.
Other factors pointed the other way. The breaches were committed knowingly and deliberately, systematically and over several years, using confidential material for the employees’ own commercial gain. The former employees had also not been open about their income from the new business.
The result: the project manager and the tender engineer were each ordered to pay €500,000, and the tender coordinator €25,000.
Was the new business itself liable?
Yes. The court held the new business liable for the loss the employer suffered, to be assessed in separate follow-up proceedings for the assessment of damages (schadestaatprocedure).
The new business was not a party to the employment contracts. However, it knew about the breaches, because it was set up and run by the same former employees, and it benefited from them directly. Knowingly profiting from someone else’s breach of contract can be a wrongful act (onrechtmatige daad) under Article 6:162 BW.
Which orders and prohibitions did the court impose?
In addition to the fines, the court prohibited any further use of the confidential information and ordered all the documents concerned to be destroyed. It also barred the new business from taking part in the specific tenders for which it had already registered.
The court refused a broader ban on registering for any comparable tenders until 2032. That would in effect have shut down the business and went too far as a restriction on the freedom to conduct a business. The employer’s request for a rectification on the website and in letters to clients was also refused: with the tender ban in place, the court saw no remaining interest in it.
Compare a case in which no non-compete clause had been agreed. On 4 August 2026, the subdistrict court in Amsterdam found that a joint move by nine colleagues was not solicitation and awarded a single penalty of €25,000 for one email to a client. What was agreed in writing makes a large difference.
What can employers learn from this ruling?
A well-drafted penalty clause, combined with confidentiality and company-property clauses, gives you a solid legal basis. Timely enforcement and a well-documented loss are just as important.
The court reduced the fines largely because the employer could not show the concrete extent of its loss. If you plan to claim damages, identify and document your loss as early as possible: lost tenders, margins, investigation costs and the value of the information taken.
Forensic investigation of returned equipment proved decisive. If you have a reasonable suspicion of irregularities, you can have a targeted digital analysis of company laptops and cloud accounts carried out after an employee leaves. Respect the privacy rules when you do so: the investigation must be proportionate and targeted, and employees should know in advance that company equipment may be checked.
Consider a maximum amount in your penalty clauses. A cap makes it less likely that a court will reduce the fine substantially, because the amount is then easier to justify as proportionate.
What can employees learn from it?
If you want to start your own business, do not prepare it with your employer’s documents, email addresses or business contacts. Doing so exposes you not only to liability for damages but also to substantial fines.
Assurances that a non-compete clause is only a formality carry little weight if they are not in writing and your employer disputes them. Read your contract before you resign, return all company property and do not copy files to private accounts. The new business you set up can also be drawn into proceedings if it benefits from your breach of contract, even though it was not a party to your employment contract.
In summary
- Three former employees were ordered to pay €1,025,000 in total for breaching non-compete, ancillary-activities, confidentiality and company-property clauses.
- The court reduced the contractual fines under Article 6:94 BW, mainly because the employer had substantiated only a limited loss and the clause had no cap.
- The new business was held liable in tort for knowingly profiting from the breaches; damages will be assessed separately.
- A ban on all comparable tenders until 2032 and a rectification were refused as going too far.
- Employers should enforce promptly in writing and document their loss; employees should never use company documents for a new venture.
Frequently asked questions
What is a non-compete clause and when is it valid?
A non-compete clause is an agreement that you will not work for a competitor or start a competing business for a period after your employment ends. Under Article 7:653 BW it must be agreed in writing with an adult employee. In a fixed-term contract it is only valid if the employer explains in writing why compelling business interests require it. Restrictions during employment fall under the ancillary-activities rules instead.
How long may a non-compete clause last?
The law sets no maximum term. The court assesses whether the duration and scope are reasonable in view of the role, the market and the employer’s interests. One year is common; longer or geographically wide clauses are more often limited by the court.
Does a non-compete clause still apply if HR said it was only a formality?
In principle, yes. An oral assurance that a clause will not be enforced is difficult to prove if it is not in writing and the employer disputes it. In the ruling of 13 May 2026, the court rejected this defence because it had not been proved.
May an employer enforce the clause against some employees but not others?
Yes, in principle. The employer may decide case by case, depending on the role, the work and the new employer. The fact that colleagues were not held to the clause does not in itself prevent enforcement, although the employer must act as a good employer.
Can an employee ask the court to set aside a non-compete clause?
Yes. Under Article 7:653 BW the court can annul the clause in whole or in part if the employee is unfairly disadvantaged compared with the employer’s interest to be protected. You can also ask the court in interim relief proceedings (kort geding) to suspend it. Do this before starting the new job or business, not afterwards.
May an employer prohibit ancillary activities?
Only with an objective justification. Under Article 7:653a BW, a clause that prohibits or restricts work alongside the employment is void unless the employer can justify it objectively. Protecting confidential information, preventing conflicts of interest and preventing competing activities can be such justifications. See our page on ancillary activities.
When does setting up a competing business breach the ancillary-activities clause?
Purely preparatory steps, such as exploring an idea, are in principle not yet a breach. In the ruling of 13 May 2026, the court linked the start of the competing activity to the website going online. Approaching clients, submitting tenders or using company documents while still employed crosses the line much earlier.
What information falls under a confidentiality clause?
That depends on the wording. Broad clauses, as in this case, cover almost everything you learn in your role, including processes, prices and client relationships. The information does not also have to be a trade secret under the Trade Secrets Protection Act (Wet bescherming bedrijfsgeheimen) for the penalty to apply; the clause itself is the basis.
May I take documents I created myself when I leave?
In principle, no. Documents you created or received in the course of your work belong to the employer, and a company-property clause usually requires you to return them when you leave, even without a request. Copying files to a private cloud account quickly amounts to a breach.
What happens if I use company documents for a new employer or business?
Besides a penalty under the contract, the employer can seek a ban on further use and an order to destroy the documents. If the new employer or business knows of the breach and benefits from it, it can also be held liable for the loss, as happened in the ruling of 13 May 2026.
How high can a fine for breach of a non-compete clause be?
That depends on the penalty clause. In this case it was €25,000 per breach plus €2,500 for each day the breach continued, without a maximum. The amounts forfeited on paper ran into millions per person; the court reduced them to €500,000 for each of the two main actors and €25,000 for the third employee.
Can the court reduce a contractual fine?
Yes. Under Article 6:94 BW the court can reduce a penalty if fairness manifestly requires it, which is a high threshold. The court looks at the relationship between the fine and the actual loss, the nature of the contract and the circumstances of the breach. An employer that has not substantiated its loss runs a real risk of a substantial reduction.
Can an employer claim damages as well as fines?
Under Article 6:92 BW, a penalty in principle replaces statutory damages, unless the contract provides that both can be claimed. The court may award additional damages alongside the penalty if fairness manifestly requires it (Article 6:94 BW). Against a third party, such as the new business, the employer can claim damages in tort.
Can an employer lose its rights by waiting too long?
In theory, yes, but the threshold is high. Time alone is not enough; there must be special circumstances that gave the employee a justified expectation that the employer would not enforce its rights. A timely written notice, even if proceedings start later, usually prevents this.
When is competition unlawful after the non-compete clause has ended?
Once the clause has ended, a former employee is in principle free to compete. Competition can still be unlawful if the former employee systematically and substantially erodes the former employer’s business, for example by using confidential information or knowledge obtained in confidence. The courts apply this exception with restraint.
What should I do as an employer if I suspect a breach?
Act quickly and in writing. Send a letter setting out the obligations and stating that you will enforce the clauses, including the penalty clause. Have returned equipment examined if necessary, and document your loss as concretely as possible. If relevant material is in the other party’s hands, consider an attachment of evidence (bewijsbeslag).
What should I do as an employee before joining a competitor or starting my own business?
Read your contract and check whether there is a non-compete clause, how long it lasts and what it covers. Do not delete files and do not take documents with you. Do not start work for the new employer or business while the clause applies without legal advice. If the clause is unreasonably burdensome, ask the court to annul or suspend it before you breach it.
Law & More advises employers and employees on non-compete clauses, confidentiality and enforcement; see our page on Dutch employment law.
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