The (in)validity of a post-contractual non-competition clause in a franchise agreement: analogy with employment law?
On 5 September 2017, the District Court of Gelderland, ECLI:NL:RBGEL:2017:4565, rendered a judgment on, among other things, whether Bruna, as a franchisor, could invoke the ban on a franchisee from performing competitive acts after the expiry of a franchise agreement . The franchisee had argued that the franchisor had structurally and very seriously failed in its obligations as a franchisor, as a result of which the franchisee was forced to terminate the franchise agreement. Therefore, according to the franchisee, the prohibition no longer applies.
What does not follow from the judgment is whether an analogy of this situation between an employer and an employee has been invoked. Labor law stipulates that an employer cannot derive any rights from an agreed non-competition clause if the termination or non-renewal of the employment contract is the result of seriously culpable acts or omissions on the part of the employer (see Section 7:653(4) of the Dutch Civil Code). .
In the present case, the franchisee was not followed by the court, because it has not become apparent that the franchisee had also informed the franchisor before the termination of the franchise agreement that the franchisor was failing in its obligations as a franchisor. Because the franchisee had only made this point of view known after the termination of the franchise agreement, it cannot be established, according to the court, that the termination of the franchise agreement is largely attributable to the franchisor. The non-competition clause therefore remains valid on that basis. Because, incidentally, in the opinion of the court it has been sufficiently established that the franchisee was not involved in the notified competitive actions, the appeal to the non-competition clause was still rejected.
It can be deduced from this ruling that the power relationship between a franchisor and franchisee may in certain situations show a parallel with the power relationship between an employer and an employee. Does a small dependent franchisee deserve the same protection against a large powerful franchisor that an employee has against an employer? The court’s considerations do not seem to rule out this possibility.
mr. AW Dolphijn – franchise lawyer
Ludwig & Van Dam Franchise attorneys, franchise legal advice. Do you want to respond? Go to dolphijn@ludwigvandam.nl .
Other messages
Interests Association of Franchisees of the Netherlands (BVFN) is in further consultation with the Minister
On April 16, 2014, the previously announced meeting between the Belangen Vereniging Franchisenemers Nederland (BVFN) and the Ministry of Economic Affairs took place.
Exoneration of duty of care with the franchisor’s prognosis
In a judgment of the Overijssel court of 9 April 2014, the interesting question arose whether a collaboration should be qualified as a franchise.
Non-competition clause is lost in summary proceedings
Recently, the preliminary relief judge in Rotterdam ruled that a franchisee was not bound by the non-competition clause included in the franchise agreement.
Advance on compensation after an unsound prognosis
In a beautifully substantiated summary judgment of the Northern Netherlands Court of 9 April 2014, the question was whether an advance should be paid for the damage assessment procedure.
Collection point requires shopping destination
In my supermarket newsletter of July 11, 2013, I already predicted that the establishment of collection points for goods ordered via the internet would set the judicial pens in motion.
Developments and sales via the internet.
Developments and sales via the internet.