On 1 January 2021, the transitional rules of the Danish Act on Restrictive Employment Clauses (lov om ansættelsesklausuler) expire, and, accordingly, employment clauses concluded before 1 January 2016 will no longer apply but lapse immediately
The Act on Restrictive Employment Clauses that came into force on 1 January 2016 lays down that non-solicitation and no-hire clauses concluded after 1 January 2016 may no longer be validly concluded, and that clauses validly concluded before the effective date of the Act will lapse on 1 January 2021. With its introduction, the Act on Restrictive Employment Clauses repealed the Danish Act on Employers' Use of Non-solicitation and No-hire clauses (jobklausulloven).
A non-solicitation and no-hire clause is an agreement under which an employer agrees with other enterprises or employees, typically at senior management level, to prevent or to restrict an employee's prospect of obtaining employment with another enterprise. Pursuant to the Act on Restrictive Employment Clauses, such non-solicitation and no-hire clauses can no longer be validly concluded. However, before 1 January 2016, the effective date of the Act on Restrictive Employment Clauses, nothing prevented the parties from entering into these agreements, and the transitional period thus allowed the parties to adapt to the new rules.
The ban on concluding non-solicitation and no-hire clauses under the Act on Restrictive Employment Clauses does not affect temp agencies' use of such clauses under the Danish Act on the Legal Rights of Temporary Agency Workers upon Assignment by a Temporary-Work Agency, etc. (vikarloven). Exceptions from the ban are also made for mergers and acquisitions.
Comments by Bech-Bruun
Enterprises must be aware that existing non-solicitation and no-hire clauses concluded with employees or other enterprises before 1 January 2016 under the rules applicable so far will no longer be valid as from 1 January 2021 and therefore cannot be enforced against the contracting party.