My supplier prohibits me from hiring his staff: is such a non-solicitation clause valid?

A non-solicitation clause in a contract with a supplier or service provider can cause surprises, especially if you want to hire a talented employee of that partner. The question is whether such a clause has legal standing. Yes, a non-solicitation clause is valid in principle, but its validity is not absolute. A ruling by the Mons Court of Appeal on 3 February 2025, shows that a judge can moderate and partially void an overly broadly worded clause without the violator escaping compensation.

The facts: an accountant in the spotlight

The case revolved around a car dealer (the customer) who had an agreement with an accounting firm (the service provider) for the management of his accounts. Their contract contained a non-solicitation clause: the client was not allowed to hire staff from the firm, directly or indirectly, during the partnership and for three years after its end. In the event of a breach, liquidated damages of €15,000 were due.

Several years later, the dealer is acquired by a larger holding company. The accountant who handled the dealer's accounting from the outside firm resigns and joins the umbrella holding company shortly thereafter. The accounting firm argues that this violates the non-solicitation clause and claims contractual damages.

Appeal court decision

The Court of Appeal in Bergen ruled that the non-solicitation clause had indeed been breached. However, the court's reasoning was nuanced and followed an important principle: partial nullity.

The court found that the clause in its original form was too general and excessive:

1. Overly broad personnel description: The prohibition applied to all staff members of the accounting firm, including those with whom the client had never had contact. The court ruled that this was an unreasonable restriction and nullified this part of the clause. However, the clause remained valid for staff members who were directly involved in the service, such as the accountant in question.
2. Too long duration: A ban of three years after the end of the contract was considered excessive, especially given the initial contract term of one year. The court moderated the duration of the clause to a more reasonable period of one year after the end of the contract.

Despite this mitigation, the client was still in violation. After all, the hiring occurred within that one-year period and involved the accountant working directly for the client. That the hiring occurred "indirectly" through the parent company did not change the matter. The court therefore upheld the order to pay the lump-sum damages of €15,000.

Legal analysis and interpretation

This ruling is a perfect illustration of how Belgian courts handle contract clauses that can restrict freedom of trade and freedom of labor.

On the one hand, courts recognize the legitimacy of non-solicitation clauses. A company invests in the training and development of its personnel and has a legitimate interest in preventing customers from "hijacking" that expertise and disrupting the company's internal stability.

On the other hand, these clauses must be proportionate. They must not go beyond what is necessary to protect the legitimate interest of the service provider. A clause that is too broad is contrary to public policy. The key in this ruling is the principle of partial nullity, as confirmed by the Court of Cassation. Instead of declaring the entire clause invalid, the judge can remove the excessive parts. The court considers whether the clause is "severable" and whether retaining a moderate version is consistent with the presumed intent of the parties. In this case, it was clear that the parties intended to prevent the hiring of relevant personnel, which allowed the judge to limit the clause to that essence.

A second important point is the damages clause. The court confirms that the claimant (the accounting firm) does not have to prove that it has effectively suffered damages, nor the extent thereof. The court can moderate the amount only if it is "manifestly excessive" compared to the damages that the parties could reasonably foresee at the time of contracting. Recruiting costs for a replacement and the risk of losing the client were considered relevant factors here to qualify the €15,000 as non-excessive.

What this specifically means

• For the service provider (who wants to include a clause): Be specific. Limit the non-solicitation clause to staff members who have actual and substantial contact with the client. Choose a reasonable duration (one to two years is often a safe range) that is commensurate with the nature and duration of the collaboration. A properly drafted, proportionate clause has a much better chance of standing unchanged in court.
• For the client (facing a clause): Read your contracts thoroughly. Do not simply assume that a broadly worded clause is invalid. As this ruling shows, a judge can "save" the clause by moderating it, which can still get you convicted. Also be very careful with indirect recruitment through affiliated companies; judges usually pierce through this effortlessly.
• For the employee (who is the subject of the clause): Although you are not a party to the contract between your employer and the client, such a clause may affect your career prospects. Potential new employers may be reluctant to hire you for fear of a claim for damages.

Heading 2: FAQ (frequently asked questions)

Is a non-solicitation clause always valid?
No, not unconditionally. The clause must be proportionate and not excessively restrict freedom of trade and labor. A court can curtail an overly broad clause in terms of personnel category, duration and geographical scope.

What if the employee applies for the job himself? Does that make a difference?
No, not in most cases. This ruling confirms that the clause sanctions the act of hiring, regardless of who initiated it. The fact that the employee himself took the first step does not release the new employer from his contractual obligation.

Does my former supplier have to prove that he was harmed by my hiring?
No, not if there is a liquidated damages clause in the contract. The essence of such a clause is precisely that the damages are fixed in advance, which significantly eases the claimant's burden of proof. You can only hope for a reduction if you can prove that the amount was manifestly excessive at the time the contract was entered into.

Conclusion

A non-solicitation clause is a powerful tool to protect business investment, but it is not a free pass to unreasonably restrict competition. Case law shows that proportionality and reasonableness are crucial. A clause drafted too broadly is likely to be moderated by a judge, but rarely dismissed entirely. Care, both in drafting and enforcing such contracts, is therefore imperative.