Does your settlement agreement contain a relations clause, or does your employer want to include one? If so, it is wise to know exactly where you stand. A relations clause can have far-reaching consequences for your freedom in the labour market after your dismissal. In this article, you can read what a relations clause entails, when it is valid, and how best to act during negotiations over a Settlement Agreement.
What exactly is a relations clause
A relations clause is a provision within an employment contract that prohibits an employee from maintaining business contact with their (former) employer’s business contacts after their employment has ended. This includes customers, suppliers, or other regular business partners. The purpose of this is to prevent the employee from using the network built up by their employer for their own personal gain or for a new employer after their departure.
A relations clause has a more limited scope than a non-compete clause: in principle, you are permitted to take up employment with a competitor, provided you do not maintain contact with the designated relations. Nevertheless, some relations clauses are worded so broadly that, in practice, they are almost as restrictive.
Legal basis and conditions for validity
There is no separate statutory provision for the relations clause. In case law, it is regarded as a special form of a non-compete clause, meaning it falls under Article 7:653 of the Dutch Civil Code. This means the following conditions apply for its validity:
- The clause must have been agreed in writing with an employee who is of legal age.
- For a permanent employment contract, a clear written record will suffice in most cases.
- For a fixed-term contract, a relations clause is only permitted if the employer provides written and specific justification that compelling business or service interests require it. If that justification is absent, the clause is void.
- The wording must be reasonable and proportionate: an overly broadly formulated clause – where the employee cannot even know who falls within the definition of ‘relations’ – may be moderated or partially suspended by the court.
Recent case law confirms this: in 2025, a district court judge partially suspended a relations clause because it was practically impossible for the employee to know which relations of an employer with multiple locations across the Netherlands fell within the scope of the clause.
What changes when a settlement agreement is concluded
When employment ends by mutual consent, the relations clause plays a particular role. There are broadly three possible situations: the clause continues to apply unchanged, it is expressly restricted or removed in the settlement agreement, or uncertainty arises due to a full and final settlement clause.
A point that warrants special attention is the situation in which a relations clause in the employment contract was possibly (partially) void, but is nonetheless included again in the settlement agreement. By explicitly inserting that clause in the settlement agreement and agreeing to it, it may become legally valid after all. The court may rule that you have agreed to the clause afresh, even if it was not valid in the original employment contract. This applies even in the case of fixed-term contracts where a relations clause is not normally permitted.
Does the settlement agreement contain a full and final settlement clause but the relations clause is not expressly upheld within it? This may work in your favour, although the court will always consider the intention of both parties. The conclusion is: never leave this to chance.
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Plan a conversationConsequences of a breach
If you fail to comply with a valid non-compete clause, the financial consequences can be significant. A non-compete clause is usually accompanied by a penalty clause. That penalty must be reasonable: if it is excessively high, the court can reduce it. Nevertheless, the risk remains real that you will have to pay a substantial sum if you breach the clause. Furthermore, your former employer can seek enforcement of the clause through summary proceedings.
Even if the relations clause has been entirely removed from the settlement agreement, you are not completely in the clear. Systematically and deliberately approaching your former employer’s clients with the intention of causing them harm may still be considered unlawful competition under statute.
How to negotiate the relations clause in the settlement agreement
Negotiations over the settlement agreement are the right time to address the relations clause. Some practical tips:
- Check the employment contract first. Was the relationship clause validly established in it? For a fixed-term contract without valid justification, the clause may already be void.
- Request a list of relationships: explicitly ask the employer for a list of the relations covered by the clause. This way you know exactly where you stand and you limit the risk of an overly broad clause.
- Negotiate for removal If you did not have a relations clause in your contract, be especially vigilant if the employer now wants to include one in the settlement agreement. Your negotiating position is strong in that case.
- Always record agreements in writing. Verbally agreed restrictions or exceptions are legally worthless. Make sure all agreements are reflected in the text of the settlement agreement.
- Pay attention to duration and scope: A clause concerning a relationship that lasts longer than a year, or covers an indefinitely large circle of relationships, is easier to challenge than one with a clear and limited scope.
- Seek advice before signing Once signed, you are in principle bound by it. Legal advice beforehand costs considerably less than court proceedings afterwards.
When can the court intervene
Even after a settlement agreement has been signed, not everything is definitively settled. A court can wholly or partially set aside a relations clause if the employer cannot demonstrate a compelling interest, or if the employee is unreasonably disadvantaged by the clause. Furthermore, if the termination of the employment contract is the result of serious culpable conduct on the part of the employer, they are in principle unable to derive any rights from the relations clause. Always have your situation assessed by a specialist to understand what your prospects are.
Why Labour Lawyer Eindhoven
At Arbeidsjurist Eindhoven, we know the local labour market and understand the issues at play when you receive a settlement agreement containing a confidentiality clause in the Eindhoven or Brabant region. We critically assess whether the clause is valid at all, help you negotiate better terms, and ensure you can sign with peace of mind. Contact us without obligation for an initial consultation – so that you know where you stand before you put your signature to anything.
Frequently asked questions
Does a relationship clause from my employment contract automatically carry over into my settlement agreement?
Not automatically. A settlement agreement must expressly state whether the relations clause remains in force. If the settlement agreement contains a full and final settlement clause without the relations clause being confirmed within it, this may result in the clause lapsing. Conversely, an originally void relations clause may become valid again if it is explicitly included in the settlement agreement. Always have this assessed by an employment law solicitor.
Can my employer include a relations clause in the settlement agreement if it was not in my contract?
Yes, they can. If the employer introduces a relations clause in the settlement agreement and you sign it without raising any objection, the court may rule that you have voluntarily agreed to it. If you do not have a relations clause in your employment contract, your negotiating position is strong: you can refuse to accept the clause or attach additional conditions to it.
What are the consequences if I breach the relations clause after signing the settlement agreement?
If you breach a valid relations clause, your former employer can seek enforcement through the courts and claim a contractual penalty. That penalty must be reasonable; an excessively high penalty can be reduced by the court. In addition, the employer can apply for an injunction in summary proceedings to prohibit any further contact with his relations. Make sure you know exactly what obligations you are taking on before you sign the settlement agreement.
Can I challenge a relational clause in the settlement agreement after signing it?
In certain circumstances, yes. You can ask the district court to set aside the clause wholly or in part – for example, if the clause is too broadly formulated, if the employer cannot demonstrate a compelling interest, or if you are unreasonably disadvantaged by it. If the termination of the employment was the result of serious culpable conduct on the part of the employer, his right to rely on the clause will in principle also lapse. Consult an employment law solicitor for advice on this.
Is a relations clause different from a non-compete clause?
Yes. A non-compete clause prohibits you from taking up employment with a competitor after your dismissal or from carrying out competing activities as a self-employed person. A relations clause is more limited in scope: you are permitted to work for a competitor, but you may not maintain business contacts with your former employer's designated relations, such as customers or suppliers. In practice, however, extensive relations clauses can be almost as restrictive as a non-compete clause.
We're happy to help you brainstorm ideas. For advice tailored to your specific situation, we'd be happy to sit down with you. No rights can be derived from the content of this page and it may contain inaccuracies.
