Customer clause in employment!

by Thomas Reinholdt

Thomas Reinholdt is an experienced professional within legal and financial matters. Full service provider within legal and financial matters for small- and medium size companies.

Customer clause in employment!

by | Jun 1, 2023 | Blog, Employment Law

Reading Time: 3 minutes
When an employee quits a job, the company may need to protect itself against the employee taking customers from their old to their new employer. One way to prevent this is a customer clause. Then the employee’s opportunity to take customers to a new job will be limited. In this article, we will look at when customer clauses can be enforced.

Which customers are covered?

A customer clause may not cover all the customers of the old employer. It only covers customers with whom the employee has had contact or been responsible for the last year before the employer notifies that the customer clause will be enforced. The term “contact” includes both direct and indirect contact with the customer. The employee’s contact with the customer can e.g. be negotiations or discussions in connection with entering into contracts in which the employee has participated. Follow-up of customers is also included unless it is sporadic. Whether there has been sufficient contact for a customer clause to apply will be a specific assessment.

Even if the employee has not had direct contact with the customer, customers for whom the employee has had a more overall responsibility will be included. There will be cases where the superior employee has had the authority to bind the employer in the customer relationship, without there having been any direct contact between the customer and the employee.

Customer clause length

A customer clause will only apply for one year from the termination of the employment relationship. The employment relationship ends when the notice period expires or on the day the employee is dismissed. When one year has passed, the employee can contact customers as usual.

When and how must customer clauses be entered into?

A customer clause must be entered into in writing. It must also be entered into while the employment relationship lasts. It is common to enter into customer clauses at the beginning of the employment relationship or during the employment relationship. However, there is nothing in the way of entering into such an agreement during the notice period. It must only be entered into before the employment relationship ends to be valid. If it is entered into after the employment relationship ends, the relationship is regulated by section 36 of the Contracts Act instead.

When can customer clauses not be enforced?

An employment relationship can be terminated both by the employee and by the employer. A customer clause cannot be enforced if the employee is dismissed due to the company’s circumstances. If the company has to be downsized, the employer cannot enforce the clause. A customer clause can also not be enforced if the employee terminates the employment relationship as a result of the employer’s default. If the employee resigns himself or is dismissed by the employer due to the employee’s circumstances, the clause can apply as normal.

The company’s chief executive may be exempted from the regulation on customer clauses if it has been agreed in writing that they shall not apply, cf. the Working Environment Act § 14 A-5.

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